Money

Here’s how you can fur­ther re­duce monthly costs

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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.

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