Here’s how you can further reduce monthly costs
HOW can we cut back even more when our belts are already so tight? According to the 2019 Old Mutual Savings and Investment Monitor, 30% of employed urban households have fallen behind on paying accounts in these tough times. Your Money went in search of more ways to reduce monthly expenses.
1 REVISE YOUR INSURANCE
Shop around with various insurers and find out if you can get a lower premium for the same cover on funeral, home contents, car and building insurance.
Many people don’t do this because they think it’s too much trouble but the process doesn’t take long at all. A broker can do a cover and premium comparison for you, or you can call different insurers and find out what they charge.
Websites such as hippo.co.za and bettercompare.co.za also offer these services. You can also look at the excess on your car and home insurance – that’s the amount you must pay out of your pocket before an insurer pays out a claim. The higher the excess, the lower the premium.
Ask if you can increase your excess so your monthly premium is less. You’ll have more to pay in the event of a claim but it’s a calculated risk that could save you several rands every month.
If you still have the same car as last year, you need to adjust the insured value.
Your car loses value as it ages and you need to adjust your insurance – the insurer won’t necessarily do it automatically. If your car is worth less, your insurance premium should also be less.
Most insurers will give you a discounted premium if your home, building and car insurance are all covered by the same company.
If you’re insured at different companies, find out if you’ll get a discounted premium for the same cover if you move all your insurance to one company.
2 NEGOTIATE YOUR INTEREST RATE
If you have a home loan and your record shows you faithfully pay the full amount monthly, your bank might be willing to bring down your interest rate.
You could also find a better interest rate if you move your home loan to a different bank – one reader did that and brought her interest rate down from 14% to 11%.
Just remember there are costs involved when you move your home loan, such as the reregistration of the bond, but the bank giving you the bond might be willing to give you a discount on such fees.
Make sure the lower interest rate will compensate for any fees you might have to pay – the bank can help you calculate this.
3 REVISE YOUR CELLPHONE AND DATA CONTRACT
You don’t have to automatically stay with the same service provider when your contract runs out. Compare all the offers in the market.
If you pay R150 a month less, it works out to a saving of R3 600 over 24 months.
Also, don’t rush to get a new phone every time your contract is up – if your existing phone still works, keep it and just get a data or airtime package.
These packages cost less because you’re not paying off a device.
4 RECONSIDER YOUR CAR REPAYMENTS
It’s increasingly costly to pay off a car, drive it and maintain it.
Wesbank’s mobility calculator – which measures how much car payments, petrol, insurance and maintenance cost a month – found the average car owner spends R7 851,39 a month.
That’s 3% more than last year – and a whopping 28% more than five years ago.
The largest chunk of the monthly cost is the repayment on your vehicle.
Consider trading your car in for a more affordable model that’s lighter on petrol.
The monthly savings can add up to thousands over the repayment period.