The first quarter of 2022 presents the perfect opportunity to reflect on your spending of last year and think about what you’d like to do with your money in the months to come. While you might want to save and invest to realise your goals, you may feel as though you don’t have enough money to act on your intentions.
But you’d be surprised at just how much money you could save by cutting back spending on wants that you don’t need to live your life.
“A good place to start is by looking at where most of your discretionary spend went in 2021,” said Zanele Mbere, head of client solutions Individuals South Africa at Standard Bank.
“How many times did you hand over R30 or so for a takeaway coffee in a month or over six months? It may seem insignificant at the time, but if you’re buying coffees frequently; it adds up at the end of the day.
“Monitor your unnecessary purchases for a period and calculate how much this will cost you in a year– you might be surprised to see just how much you’re spending and, more importantly, how much you could save if you sacrifice those luxuries.”
Mbere suggests six ways to make more money available for saving, investing and for spending where it counts. In other words, putting money towards bringing your long-held goals and dreams to life.
Be energy efficient at home – Your electricity and gas bills likely went up in 2021 due to the rise in electricity tariffs, resulting in an even bigger drain on your finances. So, you can look at ways of reducing your electricity and gas use by being more efficient.
Are your outside lights burning brightly during the day, or are your household members wasting gas by having long hot showers in summer? When it comes to the pool – is the pump running around the clock or working during the daytime when electricity costs more?
By taking a few practical steps to reduce your everyday energy use in the home, you can put back an extra few hundred rand in your pocket each quarter.
Cut out the takeaway coffees – If you’re in the habit of buying a cuppa during the weekdays and/or on weekends, it can end up costing you about R5000 a year. By opting to be your own barista, you could make those cups of coffee at home for under R1000. That is a massive saving of R4,000 for the year.
Swap take-outs for homecooked meals – Regular take-outs can quickly run up your monthly food bill. An average meal for one person will cost you about R100, whereas you could easily prepare a meal at home for four people for the same amount. If you eat out twice a week and reduce this to once a week, you could save about R4,000 for the year.
Kick the habit – Smokers or vapers may be shocked at just how much their habit set them back in 2021. Simply doing the calculation might just motivate you to kick the habit in 2022. The R40 a day for a box of cigarettes has always been built into your budget so rather put it into a savings account going forward. You will end up saving between R13,000 and R16,000 per year.
Shop for second-hand clothing – When reviewing their 2021 spend, fashion lovers might find that a substantial amount of their hard-earned cash went to clothes. If you want to cut back on your clothing spend but still update your wardrobe with a few pieces each month, consider shopping for pre-loved clothing.
The second-hand clothing market has recently experienced a boom and there are now various platforms that offer contemporary items at a fraction of the in-store price tag. You might even want to sell some of your own clothing to make space for your new outfits. A good rule to adopt is sell one of your own items before purchasing another.
Take advantage of rewards programmes – How many rewards points do you collect per year by simply swiping your card to pay for goods and services? Let those points accumulate throughout the year as you make purchases, and transfer what you have earned into a savings vehicle.
Applying these simple changes could make your finances look significantly healthier at the end of the year. You will have an extra R20,000 to R30,000 of disposable income to save, invest or even use for that long-awaited holiday. Why not act now? If you make some changes to your lifestyle, you can already start realising your financial goals in 2022.