Become debt-free with these 2020 saving tips
Category RealADVICE
If you went a tad bit overboard during the festive season and spent money that you do not have as yet, chances are that you need a great recovery plan to become debt-free while trying to save for a new home at the same time. So, you have a pile of bills, where do you start?
Make a list of your debts
Google spreadsheets are a great tool to help you keep track of your finances. Create a new document and list all your bills along with their balances, interest rates, as well as the minimum payments for each account. This spreadsheet will assist you in the months to come by giving you an idea of just how much more you need to pay.
Develop attainable goals
You can set your payment goals by assessing just how much you can afford to be paying each month. Let's say that you can afford to pay R3000 per month for your car premiums. You can now estimate how long it will take to pay off your debt by dividing your debt by your monthly repayment. For instance, R30 000 (total debt) divided by R3000 (monthly premium) will give you 10. This means that in 10 months the balance for on your car will be paid off. While paying off your debts can take a bit longer due to interest amounts, having an idea of where you are going is a great method to help you develop your goals. Remember, aim to pay off the debts that have the highest interest rates to ensure that you do not go into more unwanted debt.
If you are planning on purchasing a new home while in the process of clearing your debts and saving money, you can use the BetterBond affordability calculator to establish the size of the loan you can qualify for. Having a better understanding of what you can qualify for will motivate you to pay up your bills more quickly and avoid you from making any new debts.
Ways to save money:
Cut down on your cell phone bill. If your contract is coming to an end, consider cheaper contract options and compare rates from the different service providers. Another way to save is by capping data and calls or switching to pay as you go.
Reduce your travelling expenses. Avoid using your vehicle as much as you can. Join a lift club, plan efficient routes, use metered taxi services like Uber or Bolt, order your goods online and make the most of free delivery services. If you need to go to a mall, take advantage of their free parking options.
Say no to takeaways. Food tends to cost a fortune if you had to add all the times you bought lunch or dined out. Ideally, pack lunches from home-cooked meals, it will save you a ton of money.
When last did you use that gym membership? You can pause your membership until you are financially stable and work out at home. Sadly, in South Africa satellite subscriptions are sky-high, however, good alternatives are streaming services which cost much lesser. Bear in mind, streaming services use data which may also cost a lot, depending on the plan you have with your network provider.
At home, you can save on your electricity bills by switching off unnecessary lights, plugs, geysers and replacing bulbs with energy savers. Also, avoid using too much water. These saving methods will assist greatly in reducing your utility bills.
When you feel like you have combated your debts and is ready to tackle the property market, contact your nearest RealNet office for the best deals in the neighbourhood of your choice.
Author: RealNet
