Cape Town - Want to travel, but not sure if or how you can afford it?
Low-cost airline FlySafair's CFO Pieter Richards offers some budgeting advice:
Ensure you have a clear view of exactly what all your costs are
This is a very basic principle, but it’s the most essential one when it comes to saving on costs.
"In business we have to rely on our budgeting processes and our finance teams to give us a clear overview of exactly where we’re spending money and what the reasons for that spending are. When we know things are tight on a financial level at home, it’s often tempting to just avoid the bank statement," he said.
"We tend to look at the minus sign behind the total, cringe a little and move on. It’s essential though to take the time to go through every expense to figure out where your money is going – knowing what’s costing you a lot is the key to finding the places where you can cut on your costs."
Sometimes spending more actually means spending less
Often when we start cutting costs we simply look to drive down the total bill for the month without considering the medium to long-term view.
Take cleaning products for example; there may be a cheaper no-name brand on the shelf that will save you a few rand at the till, but how good is the product?
How much of the product will you end up using and how long will it last? Sometimes the solution at hand may be more expensive but one branded bottle of cleaning solution might be equal to two bottles of no-name brand, and you’ll save by opting for the better quality.
Be honest about what is critical
This is such a tough point. In business we are often faced with costs that support items which are not actually business critical, but just really nice to have. That fancy new office coffee machine would be amazing, but there’s actually nothing wrong with the one that we have now.
The same applies when it comes to making tough choices about what’s critical in our households. For example, it may be nice to have a top of the range satellite TV package, but perhaps the slightly cheaper option will actually suit you just fine.
Remember to shop around
It’s essential to be aware of all the options that are available to you, and to test out new options that might save you money.
To use a travel example, you might be in the habit of always going to one airline, or one hotel that you know well. But have you shopped around to see if there are equally good or better options out there that cost less? The same is true for things like insurance. It definitely pays to compare.
Without sounding like a prophet of doom, the chances are that things are probably going to get a little tougher for consumers before they get better again, so it’s essential that we do what we have to now to ensure that we can experience some financial freedom later.Read Fin24's top stories trending on Twitter: Fin24’s top stories