Cost Cutting Measures

Accommodation Expenses

One of your biggest expenses that you will have is that of accommodation, whether you own a home or are renting.  The following are ideas to help reduce your accommodation expenses.

Reduce Household Expenses

    • Reduce electricity consumption
      • Turn your geyser temperature down –get someone competent to do it if you can’t do it yourself.
      • Turn off unused lights and appliances
      • Replace incandescent light bulbs with Compact Fluorescent (CFL) types.  They draw ±80% less power and last 6 to 10 times longer.
      • If you have a swimming pool, reduce the running time of the pump to a minimum.
      • Big electricity users are:
        • Geyser
        • Stove
        • Electric Heaters – a 3KW heater costs over R3.00 per hour to run.
        • Air Conditioners
        • Swimming pool pumps.
  • Reduce water consumption
    • Shower rather than bath (if possible)
    • Minimise watering the garden
    • Plant an indigenous garden that doesn’t need as much water.
  • Reduce luxury item spending
  • DSTV – do you really need it???
  • Move to a smaller house
  • Rent rather than buy – in the long term it is generally better to buy, but if you can’t afford it, then renting is a very good option to use.
  • Try to negotiate a longer term loan period for your house bond if you have one.  The banks will generally offer up to 30 years, depending upon your age.
    • In the short term à will reduce your immediate costs
    • In the long term à will cost more
    • Try and share you accommodation costs with someone else
      • Allow someone else to move into your house if you have the space.
      • or, Move in with someone else

Transport Expenses

The second biggest cost to most South Africans is that of transport, getting to and from work, taking children to school etc.  There are various ways of reducing the costs of transport, below are two methods.

  • Make use of public transport where possible (Taxi’s, Gautrain, etc.)
  • Join a lift club – share the cost with others.
  • Move closer to work – not always feasible.   Transport to and from work is generally your major transport cost.

What to do when in Financial Difficulty:

Have a Plan to get out of Debt:

  • Recognise your debt – go on a debt diet.
  • Take charge of your financial matters
    • Have a financial plan for recovery, and stick to it. – if needed, get someone knowledgeable to help you.
    • Know what you have available to spend
    • Know what your expenses are
  • Restructure your debt.
    • Evaluate the interest rates of the different loans, and pay off those with the highest interest rates as fast as possible.
    • Use your house mortgage if possible to pay off debts.  It is generally at a lower interest rate than hire purchase agreements.
  • Pay off your credit card at the prescribed rate – don’t be late on payments
  • Speak to your creditors – they would always prefer that you pay them back over a longer period than getting nothing from you.
  • Don’t eat out – eat at home.
    • Prepare the food yourself.
    • Don’t buy prepared / pre-cooked meals
  • Get rid of store cards – they encourage debt and often imply false savings.