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Savings the dreaded word
2016 has started with a bang!! We all enjoyed the festive season and many of us put our all into making it special for our friends and family. But January 2016 has started with the hangover of over indulgence from the holiday season. For the world as a whole the market turmoil has made for an uneasy start. Yes, the oil price is at rock bottom lows but the markets are all receiving annual growth numbers which are making everyone jittery.
So where does this leave us? As South African’s we are heading into an election year. Our turbulent politics are only going to get more aggressive as the elections near. Leaving many of us uneasy and questioning what to do next and how to protect all we have worked so hard to save. Hopefully as 2016 heads to a close things will have smoothed out and our markets will be heading back up again. Until then we are going to need to tighten our seatbelts, take the seasickness tablets and hold on.
With the above in mind, I thought I would put together a few practical ways of trying to save… yes, yes that is a horrid word and in January a word that you feel will not occur in your vocabulary anytime soon. But here goes:
1. Pay off short term debts
Store cards, credit cards and personal loans, these have the highest interest rates of the bunch. Pick one and pay off as much as you can extra into this account each month until it is all gone then close the account. Move on to the next and continue the pattern. As each debt is completed you will have more money to use towards settling the next debt.
2. Pay at least 10% more into your bond
If your bond is R5000 per month, pay R500 per month extra. This small change will reduce your bond by up to 6 years; which in turn will reduce the amount of interest you pay and make you debt free quicker.
3. Every evening when you get home, put all your coins from your wallet in a jar
This is an odd but satisfying thing to do. For the first few nights you will think it is a bit odd, but at the end of every month you’ll have a mound and be surprised. Empty out your jar count it up and put it in the bank! By the end of the year you will be surprised how much you can save. Some months it might only be saving R50 or R60, but others could be higher. Every little bit helps.
Alternatively, make an effort to put R5 every night in a jar. If you did this for 30 days (1 month) you’ll have R150 times 12 months you’ll have saved R1 800. It sounds small, but when things are tough and the idea of saving freaks you out it’s the little things that help.
4. The night before your salary clears, transfer what is left over in your account into a savings account.
Yes, some months you will be in negative territory, but other months you could have a good few hundred Rands in the account. Transfer it into a savings account or your investment.
5. Make a menu plan and stick to it.
This one will have you scratching your heads, but it really helps! Pick a night of the week and plan all your dinners for the week ahead. Make your shopping list and only buy what is on that list. The hard part is going food shopping and seeing all the delicious goodies that you would prefer to have, or should just sneak into your trolley, be GOOD! You can do it. If planning is your thing, try planning a whole months worth of menus.
Doing just one or two of the above will help your year be a bit easier and end off far more satisfyingly. Taking many small steps can help you make a major financial change. Call your advisor for more ideas and help on how to budget for the change ahead.