By: Nielen de Klerk
Ah, those pre-payday blues. You’re struggling to make ends meet, while praying for a lotto miracle. Payday rolls around and you’re splurging on sushi, champagne and an extra pair of shoes, just to find yourself stuck in the same cycle next month.
The good news is that it doesn’t have to be this way (you probably knew that, otherwise you wouldn’t be reading this). The even-better news is: we’ve got you covered (and you’ll probably still be able to eat that sushi). Here are 6 ways of making your money go further.
1. Acknowledge the issue and start saying no
Be realistic about where you are in life. What are your financial goals? Just surviving? That’s fine. Work from that point. Paying back debt? Well, these tips (and a budget) will help you get there.
It’s very easy to beat yourself up for your lack of financial progress, especially when seeing your peers buying expensive things and living it up. Realize you’re only human and start correcting the problem today.
Also realise that ‘no’ will probably be a bigger part of your vocabulary if you’re serious about change. No, you can’t go out every night. No, you can’t afford that gift.
2. Start budgeting (or refresh that old one)
If you don’t have one yet, set up a budget. Like a real-life, writing-it-down budget and not something you keep vaguely in your head. You might already have a budget, but you haven’t refreshed it in years (who knows what’s changed in the meantime). Go look at that darn thing!
This might not seem like a way of stretching your money, but if you plan it well, you’ll be able to spend money on things you want to.
Start by setting up a cash flow statement. Literally write down what money is coming in and what’s going out. Now categorise everything as a ‘need’ or a ‘want’. Not only will this show you where you’re wasting unnecessary money (daily take-away Latté, anyone?) but it will give you a good idea of where your money is actually going.
It might be really tough seeing all of the outgoing money, especially if you have a lot of debt, but face it now, before it’s too late.
After setting up a cash flow statement, you can use one of a litany of websites that will help you budget (or just download a template). You don’t even have to look overseas: Many South African financial institutions have free apps or websites that can help you out.
For example, 22Seven, by Old Mutual is a great South African app that helps with your finances and Momentum has a budgeting help service called MyFinTrack. An overseas alternative is the hugely popular Mint.
3. Use credit cards sparingly
Once you know how much you’re spending, cut back. A good place to start is with credit cards. It’s scary how easy it is to lose track of what you’re spending when using these seemingly harmless things. But when you’re trying to stretch your budget, it’s crucial to keep an eye on your credit card spending, because more often than not they’ll come back to haunt you with those high interest rates.
Only use credit cards if you know you can pay them back when you monthly credit card arrives.
4. Bargain traps (and opportunities)
“Even bargains need to be paid for,” my mother would say daily while I was growing up (much to my chagrin). Still, it remains true. Be wary of deals. If it’s not something you were planning to buy in anyway, stay away from nice-to-haves.
If, on the other hand, you know there are certain items you need to buy (thanks to your handy budget) – keep an eye out on specials. Milk may be cheaper at the store next to the one you usually frequent.
5. Changing your (cellphone, insurance etc.) contracts
It’s worth looking whether you can get a better deal on your current cellphone or insurance contract or gym membership. New customers often get better deals once they sign up – capitalise on this, especially if it can save you some money.
The flip side of this is that these new customer deals often expire, having you pay higher costs after a while. Look out for these hidden costs.
Consider changing your contracts to something that better suit your needs (and budget). Do you really need all those SMS’s offered by your cellphone service provider?
6. The small things
There are tonnes of small things you can do to curb your spending. Here are some ideas:
Curb your eating out. Those lunch breaks add up, so consider making your own food. Keep your restaurant visits to a minimum.
Look for free activities. Go to the library for books or magazines. Spend time doing cheap outdoor activities like hiking, jogging or going to the beach.
Buying bulk with friends. If you’re single, buying bulk (which is cheaper) just doesn’t make sense. Consider buying bulk with a friend and splitting the goods.
Sell your old clutter. Most of it might look like junk, but one woman’s junk is another’s treasure, right?
Save on food. Skip the name brand foods and get store brands. Make a list of exactly you need and only bu