Hands up if “save money” was one of your New Year’s resolutions for 2022… and how’s that going so far? It’s an admirable and important ambition but with the price of food, fuel, electricity and everything in between rising and rising, it’s a task that’s easier said than done.
Instead, this year we need to be savvier about and where we save. Here are some simple, sometimes little-known, ways to make your money go further.
Say no to debt with more flexible alternatives
No matter how well you manage your personal budget, unforeseen expenses always come up – the fridge breaks, your laptop gives up the ghost, to not even mention that couch that was on its last legs two years ago already. Replacing appliances, electronics and furniture typically requires a large upfront cost with the only way of managing it being through high-interest credit. But there’s another option, one that’s gaining traction both locally and internationally. Rent to own is a transactional model that allows consumers to access goods on a flexible monthly basis. Rather than purchasing a television outright, consumers subscribe to the unit on a month-to-month basis with all the maintenance and insurance costs built into the monthly premium.
Providers like Teljoy have been offering this service to South Africans for some 50 years and Teljoy continues to expand its offering. “Our subscription model prioritises access over ownership, allowing for unlimited use of the unit for no more than the cost of the monthly premium. It’s increasingly the way consumers across the globe are choosing to use electronics, appliances, furniture and even fashion and leisure equipment,” explains Jonathan Hurvitz, CEO of Teljoy.
Save money by not making costly DIY mistakes
We all want to do it ourselves, and that's probably fine if you’re putting up a shelf or two, but when it comes to professional-grade building home renovations or additions to your home, it's best to leave it to the experts.
Selecting the right professionals is key to a home project’s success, as jobs done badly lead to frustration and more money being spent on fixing mistakes.Trying to save money, too, by hiring someone who isn’t qualified may seem cheaper at first, but is a false economy, as a poorly executed job will just need to be done again. For a list of trusted professionals, an app like SweepSouth’s Connect lists reliable and rated professionals in your area, like plumbers, painters, handymen and electricians.
Review your car insurance policy
The cost of living is going even higher, with fuel prices recently having reached an all-time high and the prospect of a 20% hike in electricity charges. To make matters worse, car insurance premiums are expected to increase in 2022 at a rate beyond the usual.
Head of MiWay Blink, Christiaan Steyn, says, “Car insurance premiums are calculated based on a number of underlying considerations. Individually, your history as a driver, age, gender, vehicle type, paint type, residential area and optional add-ons to the policy impact the premium. There are, however, broader factors that also influence the total premium, which are not influenced by your personal profile, and these include inflation and increased vehicle repair costs, for example.”
As for increasing repair costs - the ongoing global supply crisis due to the Covid-19 pandemic makes it more difficult to access car parts for repairs, due to constraints on the shipping industry and supply and demand pressures.
Reviewing your current policy may make you aware of areas where you can save, should you speak with an insurer and ask for a policy review.
Save money while living in Italy
This is a once-off and it's only open to one applicant. But, if you get it, you'd be saving a whole lot of money by living rent-free in Italy for a year!
Airbnb is on the search for the ideal candidate to live rent-free for a year and Host a decayed-turned-designer Italian heritage home. With a newfound flexibility to live and work remotely, one person will be given the opportunity to relocate to Sicily with their family, partner, or friend and move into this uniquely restored house.
The picturesque three-story traditional home is located in Sambuca which was made famous thanks to its recent ‘1 Euro House campaign’. Like many Italian villages, Sambuca is suffering from a declining population so it launched the ‘1 Euro House campaign’ in 2018 to promote cultural heritage, encourage international investment and appeal to a younger demographic to restore the charm of the once bustling village.
Ideal candidates should be committed to hosting and contributing to village life. Their Sambuca residence will take place over a one year period beginning June 30th, with the successful applicant retaining all earnings from hosting on Airbnb.
You can find all the details on how to apply, more on the house and other information here.
Save money by paying extra into your bond
Save money by paying a bit extra into your bond, if you have the financial means to do so, says Carl Coetzee, CEO of BetterBond. “Even just a small amount extra each month can shave years off your bond repayment period. Also, by paying off your balance sooner, you will reduce your interest over the loan repayment period. For example, paying just R1 000 extra per month on a R2 million bond over 20 years, at the current prime lending rate of 7.25%, will reduce your loan repayment by two and a half years and save you R252 500 in interest over this period.”
You could also use your home loan to achieve other financial goals, such as starting a business or investing in another property. One way of doing this is by using the access facility on your home loan, instead of taking out a personal loan on which you will be charged a higher interest rate than on your bond. Your access facility allows you to use some of the funds that you have already paid off on your bond. The only word of caution, however, is that you should manage this with care and make sure you always pay in full and on time to avoid additional interest charges and your home loan installments going up in future.
Look for holiday deals ahead of the time
Pre-pandemic, travel advice dictated that booking your flights six weeks in advance would ensure you got the best deal. Now, not so much. In fact, according to global travel search website Cheapflights.co.za, you can find affordable flights right now for a weekend vacay this weekend not too far from home. These include flights to Durban and Cape Town from Johannesburg for a last-minute beach getaway from just about R1,100 on average. Those looking for a bush escape can find flights to Kruger from about R4,100 from KZN, R2,860 from Joburg and R6,082 from Cape Town.
Savvy savers know that one often has to look beyond the obvious for innovative ways to make your hard-earned money work harder for you.