I was chatting with a friend this morning about finances and budgetting and all that goes with that and it struck me again that there is no magic formula when it comes to money! It is just good old common sense. And in the case of bugetting, often a bit of hard work and discipline (not necessarily things we like to hear).
Most people who battle to keep their income greater than their spending seem to be looking for a magic wand to wave that will find the “big” culprit that is causing the over-spend when the truth is that it is often the little things that are over-looked and that count. Every R50 that you can cut adds up and if you can save 3 or 4 “R50” you can soon save a couple of hundred rand a month and this can be the difference between breaking even or breaking the budget.
For starters here are a few of the “little” savings you can make:
- Bank fees – if you are paying more than R70 per month for your bank account you are wasting money.
- Insurance – this includes short term household insurance (your possesions) as well as short term home owners insurance (your actual house). In both cases make sure that the insured values are correct and that you are not over-insured – you wont get paid more than the replacement cost so dont waste money on this (at the same time make sure that you are also not under-insured).
- Interest payments – make sure you are paying your credit card amounts in full before the due date. Missing this by just 1 day will result in interest being charged from day 1. Check the interest rates on your statements to see just how much you are being charged!
- Overdraft – many banks are now charging a fee for the “privilege” of an overdraft facility. If you are not using it and dont need it, cancel it – why pay fees for something you dont need.
- Bank statements – it is a good idea to go over these often to check the amounts you are bugetting on spending against the actual amounts spent but also to make sure that you know exactly what is coming off your account each month. Make sure that there are no unexplained items or amounts – there is a lot of fraud out there and companies are also notoriously slow at cancelling debit orders on policies or products that you no longer have.
- Life insurance – review this from time to time and make sure that your premiums are still competitive! If not, change the policy (but get advice before you just dive in).
- Keep track of your cash – it is the little things that add up: a cup of coffee here, a car guard there, ice creams for the kids, parking… Before you know it you have spent R100 without even realising it.
While this does not sound like a fun exercise, it is a critical one. Even if you are managing to keep within your budget each month it is important to review your expenses on a regular basis so that you know how and where your money is being spent.
