Whether its to save up for a special goal or to make it to month-end, everyone can always sharpen their saving skills. Below we explore how you can save money each month.
How do I get started?
If you’re ready to start saving money, it’s likely that you need to either free up money each month to put towards a particular expense or series of expenses, or you have a long-term goal in mind that requires you to save or put a set amount of money aside.
In either case, well done – realising that you can always save more money is a great first step to putting healthy financial practises in place that can set you up for success in the near future.
Getting started with a savings goal doesn’t have to be as daunting as it sounds, however. While reviewing all your expenses and your income can sound like a huge task, there are several things we can do to make this a simpler process where you can get on-track and on-target to reach your goal that much more quickly.
In this guide, we’ll give you a quick breakdown on how you can get going – whether that’s exploring useful services or apps to use, re-negotiating your premiums, as well as unpacking some simple money-saving tips. We’ll also point you in the right direction when starting a budget.
The first thing you’ll want to consider, however, is what practical money-saving skills you can learn. The Wonga Money Academy – which offers practical and short videos on the four pillars of financial literacy – can help to get you started:
What apps or services can I use?
Where once people had to create spreadsheets and lengthy financial plans to set up a budget and then examine how and where they could save money, modern technology allows us to quickly find new ways to examine our monthly spending and find better deals on items that we need to purchase each month.
For example, using a free budgeting template or app can help you get a quick overview of your spending habits, where you’ll be able to see exactly where and when you spend your money. Apps such as Spendee or 22Seven can quickly and securely read your bank account information to automatically categorise your spending and develop a personalized budget just for you.
Shopping for a good deal is always fun, and many major South African retailers also offer competitive discounts. Shopping online can be a stress-free way to pick up what you may need, and supermarket chains such as Pick ‘n Pay even offer a mobile app which lets you scan the prices of items in-store to see what alternative discounts are available – all in the same shop!
If you’d like more ideas, why not check out our simple guide on how you can use technology to help you save money?
How can I re-negotiate my premiums?
It’s likely that you will pay some form of premium each month – whether that’s for medical aid, home or vehicle finance or insurance, or for another major expense. Often, it’s these items that can have the biggest drain on our finances, as they could be important or necessary to maintain a certain standard of living.
While most of us will shop around and try to achieve the best detail possible on our monthly premiums, many of us don’t go on to re-negotiate our premiums once we have signed an extended contract or have some form of service agreement in place.
This can leave many of us feeling trapped, where monthly expenses continue to grow, and we are forced in to a longer-term contract that we feel we cannot escape from.
Fortunately, it’s always within your control to either re-negotiate, change, or cancel your premiums depending on what service you have subscribed to. For example, if you pay a monthly medical aid fee, you can always contact your service provider directly to change your cover, your excess (what you would need to pay in should a claim to that service provider be accepted), or your contractual agreement.
Often, if you find a better deal elsewhere, some service providers will even offer to cancel or take over your existing agreement – meaning that you can switch to a new or more affordable service with no extra cost involved.
Reviewing your premiums each year can lead to massive monthly savings and can help you dedicate parts of your financial plan or budget to purchasing services or items that you’ll actually need. Always remember, to examine new contracts carefully to ensure that there are no hidden surprises and that you fully understand the cover, agreement, and contractual period that you are signing up for.
What are some great money-saving tips?
If you need some further inspiration on how you can save money each month, why not check out our 40 massive money-saving tips? You can learn how to save money around your home – from things as simple as managing your electricity use or unplugging appliances when you don’t need them – to prioritising health by choosing simple meals that won’t just be lighter on your pocket but will also leave you feeling better.
There are even money saving tips for spending less on your car, or even some quick suggestions to help you save money on social occasions.
How can I start a budget?
The most important thing you can do to save money each month is to develop a budget that accurately represents your monthly spending. By doing so, you’ll gain a much better understanding of where and how you spend your money each month, and you’ll also gain a practical idea of how you can adjust your finances regularly to spend less on items you don’t need, and prioritize more important repayments, purchases, or goals.
When drawing up a budget, you’ll want to keep your monthly income and expenses top-of-mind – by doing so, you’ll be able to draw a realistic picture of your personal finances and make informed decisions when managing your savings goals. You’ll also see a top-down preview of where you find yourself spending the most money, and where you could potentially reduce your expenses.
Our guide on how to get started with budgeting will take you through this process, and covers exactly what you need to know – whether that’s precisely what a budget or ‘cash flow’ is, how you can start your own budgeting plan, and how you can review your expenses as well as where you can find some easy tips to help you get started.
What is a savings facility?
Once you’ve started a budget, your next task would be to set up a savings facility. This is essentially a bank account set up to house your saved cash at a higher interest rate compared to your cheque or current account.
What’s important to remember is that your choice of savings facility will determine how quickly your money grows. You’ll want to consider both the interest offered and the fees your bank will charge on deposits into your account before you set up a new account.