Cutting Costs in 2010

If you still have a job, car and house you made it through the recession! If you only have your job, you will be okay.

A lot of people earn only enough money to cover their expenses. They have nothing to save for the day they can no longer work, not to mention luxuries. Both these issues are problematic for the following reasons:

• If you last longer than your job, you will have nothing to live with if you didn't save during your working life.
• If you can't buy something small but very special every now and then, life becomes gray.

The only way out is to force yourself to save something every month!

I have been researching ways to save money every month without changing anything except my habits. I forced myself to do the following 3 things and these were the results:

1. Never exceed the speed limit on the road. Save 10% on petrol (R150pm)
2. Buy the "no name" brands and "advertised specials" in supermarkets. Save (R100)
3. Switch of lights in the house and overall electricity conscious. Save (R120)

This is a monthly saving of R370.

NOW this might seem like a lot of effort for very little benefit but consider this:

For every R150 you can save per month at 7.5% return (Money Market rate), you will have R26 700 in 10 years from now.

If I invest my R370 per month in an Equity Unit Trust I believe I will get at least 10% growth which will give me an investment of R75 800 in 10 years time!

The point is that by just thinking about saving I can have something I never would have had.

None of us have enough self discipline to save and then not spend it again so to make this work you have to SIGN A DEBIT ORDER!!! Never accumulate the saving in a tin on the fridge or in your savings account at the bank.

Some other things I do:

• Only drink coffee at a place where I can read the morning newspaper for free (save R6.20 per visit)
• Never park where I have to pay (save R7.50 per parking)
• Invest in a Retirement Annuity at end of the tax year (save up to 40% on the investment). If you earn R100 000 taxable income per year you can contribute R15 000 to an R/A and save up to R6 000 in Tax.
• Adjust my short term insurance values every year (save R100pm)
• Take lunch to work instead of buying takeaways (save R20 per lunch)
• I eat what I buy. You will only eat an over ripe banana once. Next time you will buy one less!

What I am going to start doing:

• Grow my own herbs and greens (save R100pm)

There are many more things you can save on without doing anything except changing your behaviour. We live in a world where we waist way too much. You can actually contribute to saving the Planet!!