You probably know that the longest month of the year is January, or Janu-worry. Every day feels like a Salticrax day and, after Christmas and holiday spending, it seems like a two-month wait until the next paycheque.
I’ve found that the only way to prevent a Janu-worry, and to have a month in which I can still give my kids treats, order the occasional takeout and buy a new red lipstick (a weakness of mine), or those sandals on sale in January, is by taking savings steps early.
January is way too late to learn how to save because you probably won’t have that much to save anyway. And while we always seem to set great financial goals as part of our new year’s resolutions, there are easy ways to grow your savings now. In that way you can kick off 2020 fresh, with a financially fit savings account, without having created more debt over the holidays.
Here are my money-savvy tips:
- Ask yourself: “What can you cut out”?
Daily cappuccinos? The gym membership you last used in January? Do you really need these, or can you cut them out? Have a close look at your bank statement and see what you don’t really need. You might be surprised by how much you’re paying for things you aren’t even using.
Can you cut down on takeaway dinners and work lunches, and prepare you own? You could save hundreds of rands each month by exercising some DIY.
There might be other things you can save on, for example, bank fees or insurance premiums. Speak to your bank and insurance company to see if you’re paying optimal fees for what you’re needing. Do not cancel things like medical aid or insurance to save money as this can cost you more money in the long run.
- Take advantage of rewards programmes
While it might seem like admin to use rewards cards, and then redeem the rewards, you’d be surprised by how much you can get back through cashbacks or vouchers. Dis-Chem and Clicks are my best stores for getting cash back on my shopping, and I get the bulk of my toiletries there anyway. Remember to only buy what you need, not what you want.
- Shop the sales
Again, buy what you need, not what you want. This gets tricky when you see items marked off and just want to take advantage of a great deal. A sale is the opportunity to buy your kids’ clothing for the next season, or stock up on Christmas presents. I buy stationery throughout the year when it’s marked off on Takealot or Makro, so that when it comes to the new school year, we’re sorted (and I don’t have that extra January expense).
- Buy school uniforms now
Get ahead and buy school uniforms now if your kids will need them next year. Even better — start looking around for those selling second-hand uniforms. You can save a lot by not buying new, and your kids are unlikely to know the difference.
- Do you have anything to sell?
Do you have any unopened appliances, gifts you never used, or good-as-new kids’ items? There are great Facebook second-hand groups where you can sell, plus Gumtree. You can declutter AND make money!
This is admin-heavy and not at all fun, but budgeting can give you an excellent sense of what you’re spending on and what you can afford.
The first step is to draw up a list of your fixed expenditures and other monthly deductions. Then, tally these up against your income. If your expenses are more than your income, then you need to figure out how you are going to reduce them.
If you have any money left over every month, don’t spend it unnecessarily. Rather find something smart to do with it, like growing your savings or paying off debts. Your credit card is a good place to start as it generally has a high interest rate.
- African Bank’s Tax Free savings account is a good place to start. You can invest from as little as R100 and have the option of withdrawing some or all of your money in the anniversary month (a year after you have made your deposit). Your original interest rate never drops, but you can benefit if the interest rate increases. Providing access to funds only once a year speaks to encouraging longer term saving. In addition, you can build your savings by making as many deposits as you like, up to a maximum of R33 000 per year.
- Consider your credit card usage
It might be tempting to use your credit card on nice things, or even bills, but it can result in high interest rates and even serious debt. Try to keep your credit card for emergencies only and use your debit card or cash for bills and purchases.
This article first appeared on the African Bank website.