Six ways to be more fru­gal in 2014

Finweek English Edition - - COVER - Kris­tia van Heer­den kris­tiav@fin­

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.

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