14 Oct Saving Money In Tough Economic Times
Saving Money In Tough Economic Times
In the past two years many individuals have fallen on hard times. The various global and local shakeups have created a cascading of financial contraction from the top down, with governments resorting to high-risk loan schemes and many businesses resorting to mass retrenchments, closing regional branches and some even closing up shop altogether.
The pinch is felt in everyone’s pocket, and while some have managed to bounce back or find alternative sources of income, others will have to tighten the belts for a while to come.
Unconventional ways of saving
Though there are obvious ways to save money which we’ve all been taught and told since we were young, other ways may not be as forthcoming. Rand Rescue takes a look at a few ways you can get out a little bit extra each month.
Check your subscriptions
Check your phone, application and software subscriptions to see where you’re losing out. We often subscribe to relatively cheap applications or services, and since these can often be for small amounts we don’t always spot them on our statements.
Children in particular are prone to clicking for subscriptions on their phones, and although these can be for a few cents per day, over the long term it can become a hefty sum.
Sometimes several people in a family or friend group have the same subscriptions which could easily be split between the group under one subscription – such as applications, streaming services and so forth. Discuss it with each other and see how you can share the cost as a group to save money.
Have an emergency fund
This past year has shown us just how predictable the future can be. Although it’s not always easy to save during tough times, an emergency savings fund prevents you from digging into other savings like retirement money or long-term investments. Cashing the latter in early could take a great chunk out of your savings, limit future withdrawals and early withdrawal also has tax and administrative cost implications.
Up your investment and trading knowledge
No layman should enter the investment world without knowing what they’re doing, but you can learn enough to help you understand the lingo, follow trends and interpret data (to an extent).
Of course one would like to either know everything or be able to afford the most prominent firm to make our investment choices, but for many people this isn’t an option.
The problem is that some brokers become lazy with your money, playing the safe game while ignoring long-term risks. Others, again, are a bit wet behind the ears, and can make careless bets with your money. If you know the basics of trading and investments you will at least know what questions to ask.
A broker who doesn’t answer your questions honestly, ignores your questions or gives conflicting or vague advice should not be trusted with your money. Sure, you should trust them to do what they are being paid for, but any person in any field of specialisation should be able to explain the basics of their trade to their clients without being condescending or evasive.
Check your broker fees
While we’re used to shopping around for bank accounts and cards which offer the lowest monthly costs, we don’t always consider brokerage and investment administration fees.
Although there are industry standards and certain caps on specific fees which financial advisers and brokers can levy, they can often get away with charging big amounts by breaking these up into distinct charges levied for different administrative or service offerings.
Brokers and investment firms also often don’t show their take-home fees on monthly statements, add these onto statements at arbitrary intervals or position or pool charges in such a way that people aren’t aware that the fees levied are for broker salaries or administrative costs.
Question excess fees
Whether it’s your broker, medical aid or bank, be sure to ask the service provider what excess costs are for and to break down their administrative levies.
Insurers, banks and credit providers are prone to market better benefits at lower cost, but they make up this shortfall by charging small incremental administrative fees, asking for exorbitant excess co-payments or charging for nonsensical administrative costs when claims, payouts or statements are requested.
Change your debit order dates
Until recently, service providers had all the power when it came to debit order or payment dates. The NAEDO system which allowed for tracking a client’s account and recovering payments due as soon as money is available left many people without funds for day-to-day expenses those last days of the month. Additionally, many service providers set their debit dates to such arbitrary dates which would allow them to charge a monthly late-payment penalty as this date would traditionally fall a few days before payday.
South African legislation has long allowed consumers to question debit order dates and make arrangements to set this date to ensure they have money in their accounts, but service providers still fell short by not honouring this.
The new Debicheck system will not only allow consumers to deny unauthorised debit orders, but it will allow them to set the debit order dates accordingly. The new system doesn’t merely allow service providers to submit a standing instruction to your bank, instead, the bank will ask you to review the debit instruction and amend, approve or reject the instruction.
If your service providers aren’t using DebiCheck, ask them to switch in line with South African legislation.
Time your buying
Learn to play retailers the way they’re playing you. Timing your buying works in two different ways.
Buy 2 months before or right after sales
Many people flock to retailers or online shopping sites right before Christmas, black friday, Easter and other grand events. And many are super impressed by rapid price cuts.
What people don’t realise is that most retailers incrementally raise stock prices for all items or only ‘sale’ items incrementally in the months or weeks preceding a sale. The annual cost, or cost over time is calculated in such a way that they can make the same amount of money through ‘big sales’ as they will have without these sales. Buying at least two or three months in advance should see to it that you get around the same prices OR buying after sales for events like Easter or Christmas will force retailers to drop their prices.
Shop around online before buying
If you have your cookies enabled and/or your social media apps are linked to Google or shopping sites, wait a while before buying.
Add the items you want to different carts and then drop the cart without checking out. In the next few hours or days these sites are bound to offer you increased discounts on the items you wanted to prompt you into buying.
Save money through relocation
Although emigration requires an initial investment, you could also save money by reinvesting your SA funds abroad. Some countries even offer pension incentive schemes which could see your retirement money grow exponentially from the get-go.
If you’re planning on moving abroad or already living in a new country, let Rand Rescue assist in your cross border finance.
Simply leave your details and we’ll get back to you!
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