Six ways to be more frugal in 2014
MONEY HACK #1: SHOP FOR A BANK Bank charges have a way of stealthily depleting wealth. If you are paying more than R100 in bank charges on a cheque account, you are paying too much. Take your latest bank statement and add together all the costs from your bank. If you don’t know what that inconspicuous R3 charge was for, assume it’s from the bank. If you are paying transaction costs on debit or cheque card purchases, you need to move. If you’re paying to draw money every time, you’re paying too much. Shop around for a bank with the lowest bank charges for your financial needs, move your accounts across and put the money you save towards a monthly ETF debit order.
MONEY HACK #2: TRY PREPAID FOR A MONTH Buying prepaid airtime is a good way to determine if you’re paying too much i n telephone charges. When your cellphone contract comes up for renewal or before taking out a contract at all, switch to prepaid for a month. Buy R100 airtime and R100 data and use until you run out of money before buyi ng more airtime. See how much you spent on airtime and data in a month before taking out or renewing your contract. If you spent R200 on airtime and data during your prepaid experiment, you shouldn’t be paying more than R200 for your cellphone bill. Remember, there’s no shame i n remaining a prepaid customer. No one will ever ask.
MONEY HACK #3: HAGGLE FOR INSURANCE Here’s a little secret: the insurance i ndustry i s highly competitive. I f you’re not phoning your insurance provider once a year to negotiate your premium, you’re paying too much. When negotiating a better premium, ask for the highest possible excess amount. Make R1 000 excess the goal and negotiate with that i n mind. Also ask to have a courtesy vehicle included so you have wheels if something happens to your car. Now phone insurance providers until you find one that is cheaper than your insurance and request a quote. Phone your existi ng i nsurance provider, tell them about the cheaper quote and ask them to lower your premium. Most of the time your current provider will try to accommodate you. If not, move.
MONEY HACK #4: UNDERSTAND UNIT COSTS Comparing prices when grocery shopping is a very easy way to save money every day. To really save, however, you have to be sure to compare apples with apples. The easiest way to do this is to break a product down into its smallest part. Let’s say, for example, you’re buying toilet paper. Baby Soft 2 Ply White Toilet Paper costs R53.99 on Pick n Pay’s online store. The way to work out if this is cheap or expensive is to work out how much the toilet paper costs per roll. Divide the price per pack by the number of units in the pack – in this case nine – to get the price per unit. In this case it works out to just under R6 per roll. Now work out the price per roll for different brands and quantities to tell whether you are really getting the best value for money. Compare the price per 100g for foodstuff, price per litre for liquids, price per kilogram for cheese and meat and price per egg for eggs.
MONEY HACK #5: GET MARRIED Getting married i s an awesome way to save money. Consolidating the cost of two households essentially cuts expenses in half. Marriage means you share the cost of rent, electricity, insurance, shopping and housekeeping. If you’re not into marriages of convenience and not currently in love, consider other types of money-saving marriages. Move in with a friend who shares your money values, advertise for a roommate online or even consider moving in with a colleague to save on transport costs to work.
MONEY HACK #6: BRING YOUR OWN Bringing your own instead of buying is a good rule of thumb for most things. Going to work? Pack your own lunch. If you save R20 a day on buying lunch, you can save R5 200 per year, which means you could take a trip to the coast on lunch money. Paying a corkage fee at a restaurant means you can bring your own wine. A bottle of Haute Cabrière Pinot Noir costs R80 per bottle when you order in bulk from the estate. The average price for the same wine at a restaurant is R170 per bottle. If you pay R50 corkage fee at a restaurant, you save R40 per bottle of wine by bringing your own. Going to a concert? Pack a picnic. Eat before you go into the stadium and pack a sandwich for after the show, save on the price of however many boerie rolls you consume at a time and avoid the frustration of standing in line for food.