Johannesburg - July is Savings Month, and it comes at a time when most people find themselves between a rock and a hard place due to the high cost of living. Rising food and fuel prices, and a spate of rate increase hikes have left many struggling to meet daily costs, never mind setting aside money for savings.
The latest figures show that South Africa has one of the lowest savings rates in the world. Sitting at a shocking 0.5%, Deloitte’s South African Investment Management Outlook 2023 states that the country’s savings rate is the worst in the world among emerging economies and a far cry from Brazil’s leading 16,9 percent savings rate in this grouping of peers.
And while it may seem daunting to be able to set money aside each month, small amounts saved can add up over time and be used to build up a nest egg. Financial experts explained that the trick is to find practical, easily achievable ways to make savings in everyday life.
Here are some smart things you can do:
Make your fridge more efficient
We all know that using your oven sparingly, switching off your geyser when not in use, and putting in LED lights will save money. But did you know that your fridge can help save cents, too? Packing your fridge properly can save on grocery expenses. Your fridge doesn’t have the same temperature throughout - the coldest part is towards the back - so keep products that easily spoil, such as milk, yoghurt, and cheese, further back rather than in the side door shelf to help them keep longer.
Experts suggested cleaning the outside back of your fridge to save on power costs. The coils at the exterior back of a fridge work to cool the air down but can’t do so efficiently if they’re coated with dirt. Once a year, pull the fridge away from the wall and gently brush off any grime and dust on the coils. Cleaning them can reduce the amount of energy your fridge uses by up to 30%.
Disconnect appliances and electronics normally left plugged in and on standby mode. These devices consume electric power even when not in use. Called energy vampires, they include computers, microwaves, video game consoles, cell phone chargers, and anything with a power light or timer. Other culprits are TVs and gate motors that turn on instantly via remote control. They consume energy even while sitting idle - waiting to be used and ready to receive a signal from the remote to switch on. Energy vampire appliances can account for about 20 percent on your entire monthly electricity bill.
If you’re feeling the pinch, change your shopping habits to keep money in the bank.
Buy beauty products from big retailers. Save on expensive skin and beauty products by opting for budget-friendly cosmetics. Many big retailers, like Clicks and large supermarkets, stock affordable, good-quality products. Look out for promotions that lower prices even more.
Try coconut oil. This versatile, delicious-smelling oil is great as a make-up remover, to tame hair frizz, nourishing body moisturiser, and leave-in conditioner.
Luxe up a mattress. If you need a new mattress, but don’t have the money right now, get a mattress topper to provide support, soften hard mattresses and give extra comfort.
Make it a habit to regularly re-evaluate what you’re spending your money on and see if there are cheaper options instead.
Food and groceries: Reduce food bills by replacing at least one meat meal with a veggie one once a week. Buy cheaper generic items, like painkillers, and white label goods, like toilet paper, cleaning products, and tinned foods. And, instead of forking out for pricey work-day lunches, cook and refrigerate a big pasta dish - making it easy to pack a quick lunch box in the morning.
Entertainment: Do online research to see what’s happening in your city. Art exhibitions, discounted theatre nights, and BYOB restaurants are all ways to make a night out more affordable. Invite friends round instead of eating out and set a theme, like soup and wine, with each guest bringing a dish of delicious soup and a bottle of wine.
Exercise: Ditch gym fees and invest in a treadmill, dumbbells, and a gym mat to keep in shape at home. You could also join a park run or do a free online exercise class on YouTube. Try one of the Fitness Blender 600 free cardio, strength and toning videos, while Yoga with Adrienne has a range of yoga videos.
Save on insurance
According to a recent survey by market research company InfoQuest on what services and policies South Africans have cancelled in the last six months, people under 35 are more likely to cancel their household insurance, medical aid, and funeral policies. Experts warn that although it may be tempting to cancel insurance policies, it’s a huge financial risk to do so.
Head of digitally-based motor insurer MiWay Blink, Keletso Mpisane, cautions that if you cancel car insurance and your car is stolen or involved in an accident, you could incur considerably higher expenses than if you’d kept your insurance. “It’s prudent to evaluate what you’re paying on insurance, but it’s never a good idea to cancel your insurance or let it lapse,” she said.
If you feel your insurance costs are too high, see how you can find a car insurance that is more suited to your needs or an insurer that understands your lifestyle and rewards you if you don’t drive a lot, advises Mpisane. With MiWay Blink, for example, customers who don’t drive during the course month are paid a refund of up to 50% of that month’s premium. The insurer also rewards customers with R500 for each successful new referral made.
Make this Savings Month more meaningful by adopting new money-savvy habits to help you deal with the soaring cost of living and even create a financial safety net for the future.