You have worked hard to get to where you are. You own designer gear, a hot hatchback and a trendy condo. You may eat out in the best restaurants and your peers look up to you because you are moving places. 18 months ago life looked rosy, so you owed the bank a fair amount of cash but you could easily afford the repayments.
But things have changed; you, nor anyone else could have predicted the life changing events that have occurred since you took delivery of your car. Food, petrol, and electricity prices have spiralled, not to mention interest rate hikes. The combined effect of these increases has cramped the style of many South Africans. That’s the bad news.
The good news falling behind on your payments is not inevitable. There are things you can do to cut back on expenses and increase income-if you are willing to make sacrifices.
Imagine that you no longer had an income and you had to survive on one month’s salary for the next 4 months, this is how you should think when shaving expenses. If you are really ruthless with your budget you can get those expenses down
Here is How:
Food : Read every price tag on the shelf at the grocery store. Look for the cheapest brand, then look at price per unit for quantities. For example, washing powder may cost R40 per kilo for the 2 kilo bag but a three kilo bag may be R32 per kilo. So the larger one is more cost effective. This is usually the case for most bulk purchases but not always, retailers know that we make the assumption that larger quantities are cheaper so sometimes the smaller quantities are cheaper. There are also cheaper brands of the same thing but don’t buy cheap coffee – no-one should have to drink cheap coffee. Stay away from pre-cut vegetables. Not only do they lose some of their nutritional value they can be as much as 30% more expensive. Try cooking two or three extra meals at a time and freeze then. It will save on electricity too. I don’t have to tell you that eating out is costly, but you don’t have to stay home, when you go out, eat at home first and have a dessert or drinks with friends, if you want to maintain your image just tell them you had a big business lunch.
Petrol: Form a lift club. Just one person helping with petrol will make a big difference. Use your company’s intranet or use your social media network. Don’t keep anything heavy in your car, extra weight means more fuel. Keep your tyres at the correct pressure, take off roof racks (they cause drag), and tread lightly on the accelerator. You will save fuel simply by reducing your speed by 10 km per hour and you will also make the green peeps happy.
Kid’s: If you have an aspiring Vanessa May or Lucas Radebe, a short break form training will not affect them in the long term, losing your car will! Explain to them why you need their help. Give them pocket money instead of constantly buying stuff for them. It will put a cap on their demands and teach them about money management.
Electricity: Switch off all unused appliances. Don’t leave a big urn bubbling 24/7, shut down computers and switch off your geyser before you go to bed. Use a hot water bottle instead of an electric heater, or put on an extra layer of clothing.
Banking: Really scrutinise your bank charges and the way you handle you bank account. Go and see a consultant to find out if you can get a better deal. Also check your account for debit orders, you may be paying for services you don’t need or want.
Medical: If you have a full blown medical aid that covers you if your nail breaks or sniffles, consider reduce it down to a hospital plan if you are generally fit and healthy; It could save you as much as R1000 per month. You can resume the full service plan when you are back on your feet financially. Whatever you do don’t cancel your medical aid, one accident can cost in excess of R200, 000
Cell phones. Use your free services like whatsApp and Skype and cut the calls.
Whatever you decide to do don’t decide to do nothing. Ignoring the situation makes things a whole lot worse. If possible try and increase your income, if you have an empty room in your home rent it out or consider getting a part time job. You can also sell stuff, when you look around your home you will be surprised at what you no longer use. The rule of thumb is if you haven’t used it for a year-you “aint gonna” use it! Sell it and use the cash to pay off an account or two.
Remember all this is temporary. If you do it right you will be able to get back on your feet and resume a less restrained life with your finances intact.