Trim your budget, not your lifestyle

Interest rates are going up again putting even more strain on our already stretched budgets. Cancelling DsTV or the daily cappuccino may be the most obvious cost cutters, but for some reason are the hardest. Here are 10 ways to reduce costs without having to give anything up.

1. Settle Debt: While a savings account is a great idea it doesn’t always make sense having money sitting on one side earning next to no interest while paying excessive interest on other accounts. Pay off your credit card and leave it in your draw for emergencies until you’ve built up your savings again.

2. Consolidate debt: If you don’t have savings to pay off your debt consider consolidating high interest debt into lower interest bearing accounts. Quite often an Overdraft facility, for example, attracts lower interest than a credit card. The important point is to then cancel whatever facility you’ve paid off otherwise you’re just creating a bigger problem.

3. Re-negotiate rates: Since originally applying for your bond, vehicle finance etc. you may be in a better financial situation (eg. Your salary has increased). Go back to your bank and renegotiate your rate. You could also consider switching to another bank if it makes sense to do so but be aware of admin and cancellation costs.

4. Consolidate Insurances: It hardly ever makes sense having different insurances all over the place. If your house is insured at the bank you will almost certainly save hundreds of rands by including it on your personal insurance along with your vehicles, etc. The same can be said for having multiple life insurance products. Speak to an independent Certified Financial Planner (CFPⓇ) for a full portfolio review.

5. Downgrade your medical aid and get Gap: Here’s how it works, besides a bit more cover for your Out of Hospital Expenses, higher options from medical aids are normally just giving you 200% or 300% Major Medical Cover (MMC) instead of 100%. Downgrading to an option providing only 100% MMC and taking out Gap Cover should not only save hundreds of rands, but also give you far more Major Medical Cover than you had before. (Disclaimer: Make sure you speak to a qualified advisor who really knows what he’s talking about before doing this one.)

6. Use your Wellness Program: Whether it’s Vitality, Multiply or any one of the other Wellness Programs out there, make sure you are getting value for money. It can be a little daunting initially, but when you are habitually reaching your goals you could be saving R100’s if not R1000’s on everything from free cups of coffee, discounted gym fee’s, cash back on healthy food choices and Smart Shopper points to huge savings on your life insurance premiums!

7. Use it or lose it: The whole financial model for gym membership is massive oversubscription. If all the members suddenly decided to get active you wouldn’t be able to get in to swipe your card for much needed points, let alone have a work out. Get real. If you’ve been a member for 5 years and still don’t know where the change rooms are, gym probably isn’t your thing. Save yourself a couple of hundred bucks.

8. Sell It: The same goes for that boat, bike or caravan gathering dust in the garage. If it hasn’t been used in the last few years, it’s time to declutter. Stick it on Gumtree, OLX, wherever and use the money to pay off some debt.

9. Shop weekly: Avoiding Woolworths completely may be a step too far, so instead, try and do your shopping weekly. That way you can take advantage of all the “Buy 3 for the price of 2” deals.

10. Take a bottle with: Finally, my personal favourite, take your own bottle of wine when going to a restaurant. Some places may not be too thrilled, but there are plenty of places that are quite happy to charge a small corkage fee.