Financial fasting…and other clever ideas to make your money go further!
Can I get it for less?
This is all about making better spending decisions. If you still want it, if it’s within your budget and you’ve asked yourself “Do I really need this?”, then get it for less… always.
The economic downturn, combined with technology, means nearly everything can be bought cheaper somewhere else. Start with your big, regular bills and search online for the best deals – a site like hippo.co.za, for example, can give you comparative quotes for a number of insurance policies, from household to car, so you can see if you’re still getting the best deal. Next, look at changing your regular spending choices – switch to the coffee shop that charges less, for example, or to one that gives you a discount for bringing your own eco-friendly cup.
The latest diet craze can work for money, too
Fasting has become one of the most popular ways to lose weight, and it also works for your cash.
Pick a couple of days each week – or every other weekend – and only spend a limited amount of cash. Leave your cards at home and budget carefully. If you decided to spend R200 less every second weekend, say, you’d save R5 200 over the year. Not bad!
It’s hard to cut back permanently, and saving that way often results in a big financial blowout to make yourself feel better. So, just cut back some of the time instead – as it’s not forever, it’s easier to stick to this financial fast, so you can spend normally on the non-fasting days. Think of pain-free ways to diet financially – perhaps it means making a sandwich at home, instead of eating out for lunch.
Track it or lose it
We all have good intentions when it comes to our cash, but it’s easy to lose track of where it all goes.
Use technology – a spreadsheet, money app, or even just checking your online banking – to monitor where your cash is really going. It’s a bit like counting kilojoules. If you have to write down everything you eat, you tend to eat less. The same applies to your money.
The advantage of using an app on your phone to track spending is that you take your phone everywhere, so all your sandwiches, coffees and treats can be easily logged.
Try to make trade-offs
Most of us think twice before spending, but are you asking yourself the right questions? As well as “Do I really need this?” or “Can I really afford this?”, ask yourself about the trade-off (it’s more positive).
So stop buying lunch and bring in your own, then use the saved money for a luxe bath oil or another cosmetic treat at the end of the month. Or swap gym membership for jogging and put the money towards a spa break. By making a positive choice, rather than denying yourself a treat or an easier life, you are changing the psychology of your decision.
Also consider the long-term costs. An item that needs dry-cleaning will cost more than one that can go into the washing machine; the puppy they’ve always wanted will need feeding and visits to the vet… sometimes the trade-off is between the cost today and the ongoing costs tomorrow.
Set a budget and follow it (really!)
We all know we need one, and we all have a good idea of where our money goes. But are you budgeting for everything – not just essentials, but also savings, birthday gifts or, more boringly, car or household appliance repairs that eat up your cash each month?
Create a monthly budget by taking what you have coming in, and then set your own spending formula, splitting it into three sections (bulleted below). So your formula could look like this: Needs 60%; Wants 30%; Shoulds 10%.
- Needs The must-haves like housing, food and bills, which should take up between 50 and 70% of your income (depending on your budget).
- Wants These should be around 20 to 30% – or you’ll get frugal fatigue. Visiting the hairdresser is not necessarily a ‘need’, but it’s something you don’t want to live without.
- Shoulds We all need to set aside cash for a rainy day, retirement or for essential car repairs, so set aside between 10 and 20% for savings. Anything under 10% and you’ll probably not have enough for that emergency.
Words Niki Chesworth