Cutting Costs and Stretching Your Budget During a Recession: South African Guide For Maximum Savings
South Africa is experiencing an economic recession, and as a result, individuals and business owners are feeling the heated impact. In times of financial difficulty, the key to survival is smart budgeting and cost-cutting strategies. As difficult as it may seem, you can still save money on everyday purchases, make your funds stretch further and ensure you don’t lose out in the long run.
1. Make a Budget and Track Spending
Making a budget and tracking your spending are the first steps to cutting costs. Analyze your bank accounts, debit and credit card spending and other expenditure columns such as cash and check payments for the past six months. This will help you get an idea of where most of your money went and what costs can potentially be reduced.
After analysing your spending, update your budget by allocating money towards must-have bills or expenses, such as rent and groceries, and cutting out the rest. To track future spending and keep your budget in check, look into budgeting apps like 22seven or 22seven Smart Invest, offering in-depth analytics and breakdowns of your spending.
2. Renegotiate and Swap Out Contracts or Subscriptions
When it comes to expensive contracts, such as gym memberships, car insurance, or other monthly subscriptions, be sure to renegotiate, downgrade, or possibly swap out your current contracts. Before renewing your subscriptions, you can research what specials other stores might be offering or if it’s possible to switch to a lower-grade plan that still meets your needs. Alternatively, you could suggest to the business owners that the cost of your service or product could be reduced, in light of the current recession. It doesn’t hurt to ask!
3. Utilise Coupons, Loyalty Programs and Social Media Deals
Coupons, loyalty programs and social media deals, such as the ones offered by companies like Uber Eats, are great ways to save money. These promotions give customers access to discounts and freebies, which help you save money where it counts. For physical coupons, try searching online first or researching apps like Cake Money that specialise in offering discounts and other money-saving rewards.
4. Prioritise Necessities and Cut Out Unnecessary Items
Make a list of essential items and services, focusing on those that have to be continuously renewed or purchased often. Differentiate between things you need, like food and water, while leaving out wants, such as entertainment or luxuries. You’ll also need to consider ways to save money on these items, and if you can’t afford an item you will need to find a cheaper substitute.
5. Research The Cost Of Goods Before Purchasing
Before buying anything, find out the cost from different sellers and retailers. Make use of online searches and websites like PriceCheck and HelloPeter that compare prices and reviews of different businesses. Additionally, it may be beneficial to wait a few days or weeks before buying an item, as many products have a high chance of being discounted.
6. Make Use of Low-Interest Payment Plans or Personal Loans
If you’re in need of fast cash, you can opt for a low-interest payment plan or personal loan offered by your bank. With these funds, you can pay for necessary items like household appliances or medical bills, allowing you to spread the repayment out over an extended period of time. Before taking out a loan, make sure you can afford to repay it and that you at least read the loan agreement thoroughly.
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