Six of the Best Tips for Frugal Living
Like most of the rest of the inhabitants of planet Earth, South Africans seem to linger in what appears to be a never-ending cycle of recession, where further cost cutting may prove difficult or even impossible.
However, that is not to say that we can't learn new techniques on saving household expenditure in general. Sometimes, the idea is both brilliant and simple and may even be something easy to implement right away.
This includes, but is not necessarily limited to more prudent spending on entertainment and food budgeting, areas that we can probably all do better at, if we just focus and apply ourselves.
In this article, we explore ways of managing our money more prudently, while we attempt to master the art of living more frugally. We are going to attain this by examining how we will achieve savings of any kind, be it through a commercial bank or by way of effective cost cutting.
This is something that should be close to every South African's heart. “Adapt or die” may seem a little harsh in our modern society, but the other old adage of “necessity is the mother of invention” certainly holds true in the current economic climate.
1. Make Savings on Household Expenses
The following table reflects an alarming increase in the cost of electricity from Eskom, on a cumulative percentage increase basis since 2012. The average annual growth between 2007 - the first year of targeted increases - and 2011 was 23,06%, with the cumulative cost increase averaging at 73,32% over the same period.
Even using the government-forced capping of 8% per annum introduced this year, and applying over the next 5 years, the message is clear. South Africans have to find ways to cut their power usage - or face the stark reality that for many of us, electricity is simply going to become unaffordable.
| Year | Increase % | Increase % |
|---|---|---|
| 2012 | 16.0 | 204.8 |
| 2013 | 8.0 | 253.6 |
| 2014 | 8.0 | 310.2 |
| 2015 | 8.0 | 375.8 |
| 2016 | 8.0 | 451.9 |
| 2017 | 8.0 | 540.2 |
Source: Sunday Tribune Business Report: 16th June 2013
If it is not already one of the major monthly outlays, the increasing cost of electricity is likely to be right up there, slotting in behind the mortgage, the car finance and food costs. It is time to heed the warnings about cutting electricity usage.
If I take my current Eskom account at an average of R1,300 (already painful), I can expect to pay a whopping R3,731 a month in 2017, so I am constantly implementing cost-cutting measures around my home as you can imagine.
We all need to approach each household expense as we do the ever-rising Eskom account and make meaningful sacrifices. The alternative is to do without altogether. In the case of Eskom costs, we should be looking at alternative renewable energy sources, as a matter of priority.
2. Join Your Local Library
The cost of buying books and watching movies is becoming prohibitive. One alternative is to link with your local library where you will have access to many good book titles, as well as some videos and DVD's. Reading is a great way of expanding the mind, and you will soon be asking why you spent so much time watching rubbish at the cinema, and paying a fortune to do so.
Once you add up the cost of the ticket, and then the snacks and drinks (all contributing enormously to your waistline), plus the covered parking fees and transport costs, you could be in for a big surprise.
3. Coupon Collecting
While out shopping, take time to collect the coupons on offer for your regular grocery purchases. Avoid being side tracked by “special offers” you don't really need or want, as this will defeat the objective. Scan the expiry dates carefully, and then cash the coupons in on your next shopping expedition.
4. Less Eating Out
When you think about it, this can mean more enjoyment! Regular dining out not only costs an arm and a leg, it diminishes the magic of it all, if it becomes a regular routine. By the time you order your food and drinks, your bill could easily approach R150 per head, and then you still need to add the gratuity.
Woolworths have a brilliant marketing campaign in place in their stores - it's called “Eat in For Under R150”, and includes a range of starters, main courses and even puddings.
Something else that I have come to enjoy is breakfast out at the Spur. You can enjoy a truly decent meal and coffee for under R30 a head, including the tip. Shopping after a meal is a good idea too, because a full stomach means you will not be so easily distracted in the food stores.
5. Homes and Gardens
If you are like me, you probably think that your domestic help is indispensable. I am of course referring to the household chores as well as the garden service, which between them could easily top R5,000 a month, depending on the number of days you make use of them.
While none of us wants to work our faithful helpers out of a job, you could downsize the time they spend through better planning and some intervention yourself. Think of the exercise you will be getting from the extra activity!
6. Manage Your Money Better
Managing money smartly is a vital part of the frugal lifestyle. Squandering our precious cash is something we are all probably guilty of over time. As a nation, we must learn to take charge of our savings, investments, retirement planning and all other facets of our financial life.
Relying on the government for any hand out is simply not an option for most, and even if we do qualify, it won't amount to much in cash terms.
If you don't already have one in place, work out a monthly budget right away. It is as simple as recording the following information in your diary every month:
- A. Make a note of each monthly debit order on your bank account and the amount.
- B. Estimate every other monthly expense. Your list could include food cost, school fees, transport costs, new clothes, car maintenance, fuel, dog food, holiday breaks, entertainment, eating out and donations of any kind.
- C. List all your regular monthly accounts and their respective repayments. Record clothing store, utility accounts and the like. Remember to estimate and allow for payments to SARS for tax when due.
- D. Know what you are in for with your credit card repayments each month.
- E. Always add in a provision for the unexpected. If you don't use it, this could become an emergency savings facility.
Total up each section from A – E, to arrive at a grand total for any particular month. Remember to re-visit your diary regularly, and make adjustments for the next run.
Once you know the total, it is relatively simple to calculate how much you will have left over from your monthly pay packet. If you find you have more outgoings than incoming salary, you will have to revise your budget accordingly.
Of course, you could also supplement your income by taking on a few jobs with Survey Compare. This just has to be the smartest way to turn spare time into money that I have ever seen.