Set cash aside during tough financial times

It’s no secret that we are facing tough economic times. We have to deal with the rising fuel prices, electricity cuts and the high cost of living. But despite all these challenges, households can still save money if they become more conscious of how they spend. Here are some techniques to help you save in tough times:

START A SIDE HUSTLE

1. There are two ways in which you can achieve a financial goal. One is to look into your current budget and cut where you can. The second is to do something to earn extra income. The tough economic climate puts a lot of pressure on salaries, making living on one source of income strenuous. Starting a side hustle does not have to be capital intensive, it could simply be a hobby that you can charge for or a service you can provide on weekends.

CONTROL YOUR EXPENSES

2. A small leak can sink a ship, goes the saying. Besides the big ticket items such as a bond/rent and car payments, the small expenses can derail you from your savings objectives. One example is buying data and airtime on a whim without even knowing how much you actually spend per month. Look at the different options your cellphone service provider offers and go for the most comprehensive but cost-effective option.

MAKE SAVINGS A PRIORITY

3. The best way to prioritise your savings is to set up a debit order that goes off your account immediately after pay day. This money can go into an exchange-traded investment fund, unit trust or an emergency fund if you don’t have one yet. By having automatic debits to your savings and investment accounts, you don’t give yourself the option to back out of saving. You inevitably have to learn to live off whatever is left in your bank account after you have saved first.

PAY EXTRA TOWARDS YOUR DEBTS

4. Debt costs money. Debt such as a credit card, bank overdraft and store accounts carry high interest rates and this costs money. Putting in extra cash to pay off this debt will save you money in the long run. Equally, paying extra into your bond will save you a lot of money in interest and reduce the bond payment term.

USE YOUR REWARDS PROGRAMMES

5. Free rewards/loyalty programmes can go a long way to help you get more bang for your buck through discounts and cash-back programmes. You can use these programmes to pay for fuel, or buy airtime or groceries.

TAKE ADVANTAGE OF TAX BREAKS

6. When you contribute to a retirement fund, you can get back from the SA Revenue Service (Sars) up to 27.5% (up to a maximum of R350 000) of your taxable income or remuneration per year. It is important to remember to include all your tax certificates when doing your Sars e-filing. Should you get a tax refund, you can use that money to increase your savings.

Finally, having a sound financial plan can help you save a lot of money. This is because if you don’t have a financial plan, it is easy to spend money recklessly.

Because you don’t have a goal in mind, you will waste a lot of money as a result. Find a good financial planner who can help you set solid and inspiring financial goals.

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City Press is an agenda-setting South African news brand that publishes across platforms. Its flagship print edition is distributed on a Sunday.