The first quarter of 2022 is the perfect time to reflect on your spending from the past year and think about what you’d like to do with your money in the months ahead. Although you may want to save and invest to achieve your goals, you may feel like you don’t have enough money to follow through on your intentions.
But you’d be surprised how much money you could save by cutting back on things you don’t need to live your life.
“A good place to start is to look at where most of your discretionary spending went in 2021,” said Zanele Mbere, head of retail customer solutions in South Africa at Standard Bank.
“How many times have you handed over around R30 for a coffee to go in a month or over six months? It may seem insignificant at the time, but if you frequently buy coffees; it adds up at the end of the daytime.
“Watch your unnecessary purchases for a period and calculate how much it will cost you in a year – you might be surprised how much you spend and, more importantly, how much you could save if you sacrifice these luxuries.”
Mbere suggests six ways to make more money available to save, invest and spend where it counts. In other words, investing money to make your long-held goals and dreams come true.
Be energy efficient at home – Your electricity and gas bills have likely increased in 2021 due to rising electricity prices, which has put an even bigger drain on your finances. So you can look for ways to reduce your electricity and gas consumption by being more efficient.
Are your outdoor lights shining brightly during the day, or are your household members wasting gas taking long, hot showers in the summer? Regarding the pool, does the pump run 24 hours or does it run during the day when electricity is more expensive?
By taking a few practical steps to reduce your daily energy consumption at home, you can put a few hundred extra rands back in your pocket each quarter.
Cut out takeaway coffees – If you are used to buying a cup of tea on weekdays and/or weekends, it can cost you around R5,000 per year. By choosing to be your own barista, you could brew those cups of coffee at home for less than R1000. That’s a massive saving of R4,000 for the year.
Replace take-out with home-cooked meals – Regular takeout can quickly add to your monthly food bill. An average meal for one person will cost you around R100, while you could easily prepare a meal at home for four people for the same amount. If you eat out twice a week and reduce that number to once a week, you could save around R4,000 for the year.
Kick the habit – Smokers or vapers may be shocked at how far their habit has set them back in 2021. Just doing the math might just motivate you to quit smoking in 2022. The R40 per day for a box of cigarettes has always been built into your budget. so put it in a savings account instead in the future. You will end up saving between R13,000 and R16,000 per year.
Buy second-hand clothes – When reviewing their spending in 2021, fashion enthusiasts might find that a significant portion of their hard-earned money has gone to clothing. If you want to reduce your clothing expenses while updating your wardrobe with a few pieces each month, consider buying second-hand clothes.
The second-hand clothing market has recently seen a boom and there are now various platforms that offer contemporary items at a fraction of the in-store price. You might even want to sell some of your own clothes to make room for your new outfits. A good rule to follow is to sell one of your own items before buying another.
Take advantage of rewards programs – How many rewards points do you earn 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’ve earned into a savings vehicle.
Implementing these simple changes could make your finances much healthier at the end of the year. You will have an additional disposable income of R20,000-30,000 to save, invest or even use for that long-awaited holiday. Why not act now? If you make a few lifestyle changes, you can already start achieving your financial goals in 2022.
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