Cut out those small ex­penses, they add up

Turn lit­tle costs into pocket-size sav­ings

Sowetan - - Your Money - By Ntokozo Khu­malo

We often don’t give much thought to the small ex­penses we in­cur over the course of the month as we re­gard them as in­signif­i­cant amounts or see them as a lit­tle treat to re­ward our­selves for work­ing hard for our money. “Fam­i­lies usu­ally bud­get for their monthly gro­ceries but ig­nore small day-to-day items such as milk and bread or even buy­ing take­outs on a Fri­day night,” Happy Ngale, fi­nan­cial plan­ner at Alexan­der Forbes Re­tail, says. How­ever, the re­al­ity is that small ex­penses add up over time, even if they’re not an in­dul­gence but a need. Turn­ing your small ex­penses into small sav­ings starts with get­ting rid of bad spend­ing habits.

“Start by mak­ing small, con­sis­tent changes and they will soon pay off. Also con­sider speak­ing to a fi­nan­cial ad­viser who may shed light on some of the habits you have but have not paid at­ten­tion to,” ad­vises Ze­blon Zibane, pro­vin­cial gen­eral man­ager at Metropoli­tan Re­tail.

Avoid small spend­ing er­rors

Buy­ing small and often. Small pur­chase pat­terns can add up over a month. Rather plan ahead and buy in bulk.

Con­ve­nience over fore­sight

Hav­ing no toma­toes in the fridge should not be an ex­cuse for a take­away. Ev­ery time you choose the easy way out, you cost your­self money.

The more thor­oughly you plan your ex­penses and stick to your plan, the less waste­ful you will be in the long run.

Com­pare when shop­ping

Com­par­ing prices be­tween re­tail­ers will help you find spe­cials or cheaper al­ter­na­tives and make your money stretch fur­ther.

For­get­ting that ev­ery­thing costs money

Fall­ing asleep with the TV or lights on or a drip­ping tap in the bath­room may not seem like a big deal, but the costs do add up over time.

Not mak­ing sav­ing a pri­or­ity

Sav­ing needs to be a manda­tory ex­pense item and not an op­tion. It should be a reg­u­lar in your bud­get.

Once you have de­ter­mined your un­de­sir­able spend­ing habits, the next step is to iden­tify what you spend your money on but aren’t bud­get­ing for. “These are usu­ally nice-to­haves and gen­er­ally peo­ple know this.

“The amounts are usu­ally small like R20 for a cup of cof­fee or take-out oc­ca­sion­ally,” Viwe Dyasi, pro­vin­cial gen­eral man­ager at Absa’s Wealth, In­vest­ment Man­age­ment and In­sur­ance di­vi­sion, says.

“It may seem ir­rel­e­vant, but a cou­ple of these a month can be quite high in over­all spend.”

What you’re most likely not bud­get­ing for

Cof­fee. If you’re a cof­fee fa­natic, make sure to add it to your bud­get or, bet­ter yet, make your own great brew at home. Al­co­hol, cig­a­rettes and en­ter­tain­ment. A weekly bud­get will help you keep track of how many nights out, drinks and puffs you can af­ford.

Gym mem­ber­ship

If you’re not go­ing to the gym reg­u­larly, save the mem­ber­ship fees and hit the road for a jog and the park for a stretch.

Air­time and data

Try to as­sess how much air­time and date you typ­i­cally use in a month and pur­chase at the be­gin­ning of the month. Make use of pub­lic WiFi at ev­ery op­por­tu­nity.

Med­i­cal ex­penses

Set up an emer­gency sav­ings ac­count for un­fore­seen med­i­cal ex­penses not cov­ered by a med­i­cal scheme, and plan ahead for health ex­penses you know you will have, such as an­nual check-ups.

Turn­ing the small ex­penses into small sav­ings

Bud­get­ing apps like those avail­able from your bank or the likes of 22seven can help you iden­tify small ex­penses, so that you can plan or save on them and use the cash for small sav­ings in­stead.

Set your­self clear but re­al­is­tic and achiev­able goals, and then stick to them to see a real dif­fer­ence in your fi­nances.

/123RF

Your shop­ping must be made up of care­fully cal­cu­lated items you re­ally need.

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