The longest journey starts with a single step. Rivers consist of drops of water. Grains of sand becomes a beach. In the same way, what you do with your money every day, adds up to your money situation at the end of the month or the year or the decade. Getting out of debt is less about earning a bigger salary and more about bringing your day-to-day spending under control.
It is easy to underestimate the impact of a few rand spent here and another few spent there. It’s just a cool drink, right? Or a chocolate bar or packet of chips as you walk down the road or pay for your groceries? Well, if you do this every day it adds up to a lot of money that you could have pooled and spent with more impact.
A R10-chocolate won’t pay your loan instalment at the end of the month. However, if you buy one every day, that’s R300 for the month – which is a significant amount that can help you with getting out of debt.
So let’s look at some other ways you can save money every day.
Build a money-management system
The best way to manage your money is to have a system. It doesn’t have to complicated (in fact, it shouldn’t be). All you really need is a budget and a way to track and record your expenses.
A budget is simply your plan for how you spend your money. This plan stands on two legs:
- The bills you have to pay to keep a roof over your head, food on your table and clothes on your back; and
- The goals you want to achieve based on your values and what is important to you.
The best way to draw up a first-time budget is to track your expenses for a month or two. Use your existing spending pattern to draw up a draft budget, and compare it to the two legs mentioned above: Does your budget cover all your necessary expenses? And will the way you spend your money help you to achieve your goals?
Use the answers to these two questions to adjust your budget. For instance, to achieve your goals you will have to save money, which probably means you have to cut down on expenses to free up money that you can set aside. Those mindless day-to-day expenses are often the best place to start freeing up cash.
The process of tracking expenses and refining your budget is ongoing – do it every month and you will see your money situation improve.
Find out why you buy
Even with a budget in place, you could slide back into bad money habits if you don’t spend your money more consciously. Do any of these spending reasons sound familiar?
- The comparison game. Your friend has fantastic new shoes, or buys lunch from the cafeteria every day or gets her nails done every week. Remember – you don’t have to keep up. Let your budget alone guide your spending and saving habits.
- Emotional spending. How often do you buy something to make you feel better when you’re upset, or to reward yourself for an achievement? It’s time to explore other options, such as phoning a friend to share your joy or sadness.
- Instant gratification. Instead of buying something the moment you see it, stop and ask yourself whether you need it or only want it. If you really need it, wait one full day before you buy it, just to make sure.
- Keeping up with trends. Instead of following fashions and fads, buy what is meaningful to you.
Insource whatever you can
With a bit of planning and effort, you can cut out a lot of everyday expenses, such as takeaway food and drinks. It doesn’t mean you can never treat yourself to lunch or a drink, but if you bring your own food from home four times a week, the impact on your expenses will be significant. Other ideas are:
- Wash your own car.
- Do your own nails and skincare. Even if you buy salon products but do the treatments yourself at home, you are bound to save a bundle.
- Host birthday parties at home or even at a friend’s place if you don’t have space, instead of going to a venue.
Buy differently
You have probably heard many of these tips before, but they really work:
- Buy groceries, cleaning materials, and toiletries in bulk if you can and when it makes sense.
- Buy fewer items and better quality. Instead of buying a cheap shirt or pair of jeans that only last a few months, save up and buy items that will last longer. Over time, you will spend less, especially on clothes.
- Always compare prices to make sure you get the best value for your money.
- Shop second-hand. Clothes, books, furniture, appliances – you can buy almost everything you need second hand. It will cost you less and you will help to reduce waste.
- Borrow instead of buy. Borrow items that you don’t need to own to enjoy from friends or neighbourhood resources. For example, you can use the library instead of the bookstore to pick up recent books.
A bit of planning makes a big difference
Most of our unnecessary day-to-day expenses happen because of a planning blind spot. Here are some tips to do things differently:
- Run all your errands in one trip to save on fuel or transport costs.
- Plan your meals a few days in advance so that you only have to go shopping once, only buy the ingredients you need, and use everything you buy.
- If you need to switch on the oven for one dish, see what else you can cook at the same time to save electricity.
It is easy to feel as if you are at the mercy of your money, but by paying attention to your personal budget and spending your money more consciously, you can change it.
