Prevention is always better than cure – and being proactive instead of reactive is what we should all be aiming for in life, in general. Think about these little pearls of wisdom for a moment… now apply them to your financial health.
There are several things you can do to prepare yourself for any financial eventuality, this includes setting savings aside and adjusting your spending behaviour. If you were to consult with registered debt counsellors, this is some of the first advice you’ll be given. Below we look at four of the best ways that you can cut down on expenses and save simultaneously.
The simplest and easiest way to create a financial safety net is to start saving money. Even if you find yourself undergoing NCR Registered debt counselling, there is no reason for you to stop saving, or prevent you from starting. You don’t have to kick off with elaborate investments and build up a multi-million-rand portfolio – simply begin with a regular savings account and aim to save 10% of your gross monthly income. Most banks offer the option to open a free savings account with zero or very low bank fees that is attached to your main bank account. If this option is available to you, take it.
Depending on your financial institution, you’ll furthermore have multiple options when it comes to choosing a type of savings account. You can either opt for a regular immediate access savings account, or you can save with a notice account, where – depending on your bank – you’ll need to give 48 hours, 7 days or 32 days notice before you can access your savings. In the event that you need to access funds in a notice account immediately, you will incur penalty fees, so choose wisely – although having a bit of a barrier between you and your savings can be a good thing.
Something that is quite often overlooked, yet can make a markable difference in your liquidity, is keeping a tally on your bank charges. If you’ve never paid attention to how much you pay in bank charges monthly, we challenge you to go through your bank statements with a fine-tooth comb now. Chances are you are going to be shocked and horrified.
In addition to your monthly account fee, pay close attention to other transaction charges such as email/sms sending fees and deposit/withdrawal fees. It doesn’t end there though as many banks have clever ways of randomly deducting money. Be sure to look for charges under the guise of admin/maintenance fees, and the likes. Make note of random deductions that you’re uncertain of as you have every right to query what they are for.
You might not save tens of thousands of rands, but we can almost guarantee you that you’ll walk away a good few hundred rands (if not above a thousand) in the green, simply by switching to a more affordable financial institution. Your NCR debt counsellors might in any event advise you to switch banks during your debt review process. You don’t have to opt for the top-of-the-range product. If your aim is to save money, choose an entry to mid-level account at an affordable bank and you’ll soon see how the reduced monthly and annual costs will work in your favour.
As with banks, reassess your policies and medical aid schemes. Really think about what your personal needs are and give serious thought into the possibility that you might be over-insured. Having the best medical aid plan might be beneficial if you or a family member are suffering from a chronic illness or are frequently sickly – but if you are generally healthy, a hospital plan with or without a small savings pocket might be all that you need. You can save thousands by reassessing your medical aid plan alone.
The same goes for your insurance policies. Most importantly, your vehicle and household insurance. Check that you’re not over-insured on things such as household content. Take an inventory of your possessions and update your policy accordingly with a realistic amount. In terms of vehicle insurance, remember that the market value of your vehicle depreciates with each passing year. This means that you should be eligible for a reduction in your premium. You can also shop around and compare quotes – there are many useful online tools that will do this on your behalf in a few minutes.
One thing we do have to mention though – as soon as financial stress strikes, people tend to let go of what they think is most expendable, and policies are often what first comes to mind. In reality, it should be your last. Life insurance, investment policies, education protectors, retirement annuities, etc, are there as your and/or your spouse/children’s’ safety net for the future. Don’t let feeling the pinch now land you and your loved ones in hot water later in life. Rather consult with NCR Debt Counsellors, create a budget and cut down in other areas to maintain future financial security.
As hard as it might be to believe, grocery expenses are usually the second highest expense – after your bond or rent. Don’t take our word for it – go and add up how much you spend at grocery stores every month. Of course, food, toiletries and cleaning materials are essential but it is also one of the areas where, if you budget smartly, you can save a ton. The operative word there is ‘budget’!
We’re in the habit of hitting the shops and walking up and down the aisles, loading the trolley as we go along with no real plan in mind. Worst yet, we buy with an ‘as and when needed’ mentality, which sees us making multiple trips to the grocery store each month. This is really bad practice that most of us are guilty of. Here’s what you need to do… Plan your meals and make a shopping list!
Gauge what you need for the entire month to prepare meals and maintain your household – shop with that goal in your mind and a list in your hand! The only other time that you should find yourself at the shop is when you require fresh produce. You should furthermore not be ashamed to buy less expensive home-brand or off-label products. A few rands per product could lead to hundreds of rands saved in one grocery shopping trip.
Even if you’re not undergoing NCR registered debt counselling, these four tips are golden to help you save and cut down on expenses. If you are going through the NCR registered debt review process, your debt counsellor will work with you to create a budget that is tailored to your needs. Stick to the budget and payment plan and you’ll be withdrawing from debt review much sooner than you think!