Even though July is designated as South Africa's national savings month, many may question the viability of saving given the rising cost of living, inflation, persistent loadshedding, and rising petrol prices.
Today, many South Africans are preoccupied with surviving till the end of the month. However, there are little adjustments one can make to save money.
In this article, we ask industry professionals for suggestions on how South Africans might save money during difficult economic times.
1. Save before you spend as you spend
There is a way of saving that may help you meet your long-term savings objectives without requiring you to make major lifestyle adjustments. Micro-investment, which entails saving little sums of money regularly and over time, makes it possible to save with minimal effort, according to the founder of the fintech platform upnup, Tony Mallam. App-based investing has become more popular because it lets you use your phone to automate your savings and investments.
"There is no need to modify your lifestyle or how you save if you use a micro-investment program that accomplishes this for you automatically," says Tony Mallam, founder of the fintech platform upnup "The groundwork has already been completed."
“One of the advantages of our app, is that it is weekly, not monthly, so more regular small sums as opposed to one big sum at the end of the month, and that, more crucially, you put the money aside by doing it weekly, before you reach the end of the month and nothing is left.”
There is no minimum investment amount, so anybody may begin to save by rounding up their transactions or adding to them. Why not take advantage of a transaction that is taking place regardless?
2. Month-to-month contracts
The cost of living has soared, and so has the cost of getting the things we need for our home. Forking out tons of cash on a new washing machine or TV isn’t always possible (or the smartest option. “Rental is an alternative to ownership, giving you the option of paying monthly for that washing machine, fridge or dishwasher, which means that you free up budget to spend on the important things in life, or save up for a big purchase,” says Jonathan Hurvitz, CEO of Teljoy.
“You get benefits like maintenance and risk cover included in the monthly cost, which are fewer expenses to worry about,” continues Hurvitz. “The bonus is that, since this is a month-to-month contract, you can cancel at any time if your circumstances change, upgrade, or even downgrade if you want to save even more money. It’s a smart way to save the money that you would have spent on a costly once-off purchase.”
3. Pay-as-you-drive motor insurance can be a smart money saver
Motor insurance is one of those items that you can’t afford to neglect, because of the risk to your finances should something happen to your car!
According to Head of MiWay Blink, Keletso Mpisane, “If you're working from home, you're probably not driving as much as you used to. And, if your insurance premium is a fixed amount every month, no matter how much you drive during the month, you should change to an insurer that bases your insurance premium amount on how much you drive during the month. This could mean that you are able to save on the cost of insuring your car.”
4. Search-and-compare for accommodation deals
“Accelerating inflation nudges South African travellers towards becoming more price-conscious when planning their holidays. The good news is that, based on our data, travellers find deals for hotels in South Africa for almost half the price for the upcoming month than in the equivalent period in 2019. It’s made easy by the search-and-compare capabilities of Cheapflights' travel search functions to scout for great deals for accommodation," says Laure Bornet, GM, KAYAK EMEA, that manages Cheapflights.co.za
5. Rent-to-own solar solutions
While going completely off-grid can be a costly investment, Matthew Cruise of Hhm Energy says a grid-tied system - that largely uses solar power but is still connected to the grid - could reduce your household’s electricity bill by 60%.
So for example, a 4kW solar system installed at a cost of under R100 000 would save on average
R1 200 for a household with a monthly electricity bill of R2 000. Within five years the system would be paid off, and the household’s monthly energy costs would then be way lower.
There are ways to finance an investment in home solar, says Cruise. “You don’t have to pay upfront out of your pocket.” Adding the cost of a solar installation to your bond is one of the cheaper repayment options, and it will also add value to your home.” Rent-to-own options are also available, similar to car financing.
And, over the next few years, as Eskom and municipal tariffs increase, the monthly repayment will be lower than the cost of the electricity would have been if the household did not have the option to generate power from the sun.
“While taking the plunge to move away from Eskom power is a big decision, it’s certainly likely to reap rewards in the long-term,” says Cruise.
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