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3 ways to make your money work smartly

Published May 10, 2020



The Government together with the South African Reserve Bank have made several announcements regarding the decrease in interest rates. This can help your financial position during these difficult times.

Here are three ways you can make your money work smartly:

Your car payments

will have decreased due to the drop in interest rates. However ‘graceful’ this period may seem, it is important to remember that you pay a large amount of interest on that car that you so dearly love.

So instead of decreasing the monthly payments, contact your bank and ask them to keep the payments exactly the same. With the interest rate lower and your monthly premium the same, your payment term will decrease. This can help you build a better credit score and look good on paper.

The same rule applies to

your bond payments,

however here you may see a greater difference than that of your car payment. (EG: Car payment may have decreased by R300 while your mortgage payment may have decreased by R1500)

Again, here you will want to keep your payment amount the same (if you can afford it).

This has an even bigger effect on your credit score and relationship with the bank.

You could be able to refinance your bond quicker and use that money to fund other investments.

Buying a property

during this period can also be a financially savvy thing to do. With the prime lending rates at all time lows, it can heighten your chances of getting a bond.

The lowered interest rate can work in your favour if you opt for a ‘fixed term’, during which you can enjoy the low rates in case they go back up in the near future.

A good option to look at may be new developments. The reason behind this is that there are no transfer fees which means a reduced amount from your own pocket. Another is the fact that property prices go up the majority of the time. Only under extreme circumstances will the price of a property decrease. So you will then be in possession of an asset which increases in value.

Buying a new property means you also don't need to think about renovations and if it is an investment property, the tenants can move in immediately. Making for a swift entrance into the property market.

The idea of getting rich overnight is a tall fable. It's the little things you can do with your money that can make a big difference in the long term. ‘If you can look after the small money, the big money will look after itself.’

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