With inflation through the roof; everything has gone up in price. Food, petrol, electricity and even water has become a big monthly expense. People have to pay more and live off of the same salaries which is causing them to rack up debt like crazy.
This definitely isn’t ideal though. Debt should be controllable. You should only rack up good debt and remember that you don’t have to impress anybody. Will Smith said it well.
Too many people are buying things they can’t afford, with money that they don’t have… to impress people that they don’t like! – Will Smith
So with times like these, being tough on your monthly salaries, how do you still live a good life, but cut costs in the process? Let me give you a simple five step process on how to constrain your budget.
Five steps to constraining your budget
Firstly these five steps aren’t carved out in stone. This is how I advise people that I sit down with to cut costs and save extra money. We usually run up to about 15 different things, but in this case there will only be five.
- Cut down on unnecessary lunch takeout: Go home and make yourself lunch or take lunch to work. Resist the urge of walking across the street to the restaurant that is 13selling takeaways. If everyday lunch were to cost you R30, that would work out to R660 a month and R7920 a year.
- Cut down on Internet Speed and DSTV at home: DSTV is a luxury and so is high speed uncapped internet. If you have a PVR decoder your DSTV account will be R655 per month and if you were to have 4MB Telkom adsl and a 4MB uncapped MWEB account you will be paying R1063 for your internet at home. Now let’s say you don’t really watch tv much as you are working to hard and aren’t home much, what is the use of a full DSTV subscription and high speed internet? Nothing. Let’s cut you down to a smaller DSTV package where you will still have the benefits of movie channels, news, sport and quite a few others. Your internet can be sized down to a 1MB uncapped line from MWEB. This will bring up a total saving of R1180 per month and R14160 per year.
- Don’t pay for your friends: You heard me. I know you want to be the good Samaritan, but if you can’t afford to do it. Don’t do it. It will save you a lot of money. I’m just going to put down R1000 per month and R12000 per year even though there are a lot of us that spend way, way more than that on friends and family.
- Pay off your accounts: Yes, pay off your clothing accounts, store cards, lay buys. You shouldn’t be owing anyone anything besides the bank(If you have good debt.) This will easily save you another R2000 per month depending on what accounts you have and what their balances are. That is R24000 per year.
- Buy your groceries weekly: Plan ahead. Buy your groceries and food every Friday. Take your shopping list with you and get everything you need for the week ahead. Planning it out will not only save you fuel, time and money, but will enable you to prepare meals from home everyday. Saving you at least R500 per month. Simply because you aren’t buying a lot of unnecessary things from the shop. That’s a saving of R6000 per year estimate.
Now we have estimating saved you a total of R5340 per month and R64080 per year.
These steps above can be applied to you in a much simpler way. Cut down on all the luxuries that you pay for every month. Either eliminate them or just cut down to smaller packages. Not everyone has DSTV, Internet or clothing accounts, however you will have things that you can cut down on every month.
As you can see, it’s fairly straight forward and the points mentioned is obviously things that you have thought about and know you should cut down on. Heck, some of these things people can’t go without. I think you should put it into action for one month and see how it goes. You could possibly be saving a lot of money for those extra expenses without racking up unnecessary credit card debt.