Debt Restruct

The Ultimate Strategy for Saving More Money in South Africa

A beautiful couple ahppily laughing and smiling at the viewer on a sunny morning

With the cost of living gradually increasing, millions of South Africans are feeling the pinch in their pockets. 

We want to provide you with realistic, actionable steps to increase how much you save and invest right now and in the future. From ensuring you pay yourself first to practical, everyday cost reduction tips, this is the best way to save money in South Africa. 

Follow this strategy and watch your net worth grow over time. Let’s get started.

 

The ultimate strategy for saving more money in South Africa

 

Pay yourself first 

You cannot expect a flower to grow if you do not water it, right? This is the same for your long-term financial well-being. Before you pay any of your expenses, pay yourself first

 

What does it mean to pay yourself first?

Paying yourself, or rather your future-self first is a commitment towards your long-term financial well-being. You pay yourself by setting aside fixed amounts for saving and investing before you do any spending. This ensures that your wealth will grow over time, and it eliminates the probability of spending all of your money before you have the opportunity to invest or save for the future,

Budget a set amount of money, whether it is R100 or R1000, to be automatically paid into your savings account, investment account and/or ‘emergency funds’ account(s) every single month. These automatic recurring transfers can oftentimes be set up via online banking, alternatively, visit your nearest banking branch for assistance. 

If you are in the process of paying off high-interest-bearing debt, you can make the strategic decision to use some of your savings to pay it off quicker, however, try not to use the entire monthly savings amount. 

  

Next step: start tracking exactly how you spend your money 

One of the greatest ways to manage your expenses and savings is to create and commit to a detailed personal budget. Whether it is a daily, weekly or monthly budget – you can never go wrong with tracking your expenses. 

By tracking your spending habits, you’ll be able to identify any financial red flags you may have. Moreover, you’ll be able to cut out wasteful expenses and identify more opportunities to save and invest.     

Not sure where to start? Use a document or an app to help you.

You can begin creating a simple budget in Excel or you can try the free Google Sheets Expense Tracker template to list, calculate and track your spending. 

Alternatively, there are plenty of free and paid apps you can download – try apps such as 22Seven, Mint or Spendee.

Check to see if you qualify to reduce your debt instalment with our quick quiz

Now, put a plan in place to pay off your debt

Now that you have a savings account set up and are meticulously tracking your expenses, prioritise paying off your debt.

Here are two great ways to get out of debt:

  1. Apply for debt review, or
  2. Use a debt repayment method

 

Applying for debt review

If you are really struggling to manage your debt, consider applying for debt review. Debt review is a debt repayment process installed by the National Credit Regulator (NCR) for over-indebted South Africans to assist them in achieving financial freedom. 

The advantages of debt review are invaluable:

  • your assets are protected from repossession
  • your cash flow is freed up as your debt is reduced and consolidated into a monthly single payment
  • you no longer have to communicate with aggressive creditors, and
  • you become one step closer to getting rid of your debt safely and efficiently.

 

Want to know more about applying for debt review in South Africa? We’ve got a post that can guide you on how to apply for debt review.

When you enter into debt review, your credit counsellor will put a debt repayment plan in place for you, however, if you prefer the do-it-yourself route then you can create one of your own and tackle your debt using a debt repayment method.

Try our Debt Reduction Estimation Calculator

Check to see by how much you could reduce your debt.

Assets:

If applicable, enter your current monthly repayment amount for your home and vehicle debt below.

R
R
Unsecured Facilities:

These are your debts that do not have assets attached to them. List the relevant amounts below.

R
R
R
R
Current Monthly Debt Instalment

This is the total amount that you're currently spending on your debt each month.

R
🏆 New Reduced Debt Instalment

This is an estimate of your reduced monthly debt repayment - what you could be paying instead.

R

*Remember, this is only an estimate. Actual results may vary for each individual.

Using a debt repayment method

There are two popular debt repayment methods: the debt snowball method, and the debt avalanche method. You can use either method to get out of debt.

The debt snowball method

To use this method, simply pay the minimums on all of your accounts, then put all of the remaining money that you can towards the smallest account and repay them one by one.

 

The debt avalanche method

Much like the snowball method, start by paying the minimums on all of your accounts, however, this time you’ll put all of the remaining money that you can towards the account with the highest interest.

Now that you know how to get rid of the debt that is holding you back, let’s move on to maximising your savings and investments.

 

Maximise your savings by reducing expenses

This may sound like an obvious point, but there may be some hidden expenses impacting your financial progress! Consider the following: 

1. Take the time to review all your subscriptions and policies. This includes reviewing your medical aid, life insurance, car insurance, gym membership, etc. Is there any way you can remove, reduce costs or change to a cheaper provider? 

2. Research which banks in South Africa offer the most frugal banking services. Look for the lowest monthly bank charges, withdrawal fees and/or highest interest-bearing savings account. 

3. Manage your grocery expenditure. Reduce the number of luxury foods you buy, make an effort to meal prep and reduce the number of takeaways you purchase, and even research shop-specific deals and coupons you can use. 

4. Review your electricity and water bills. Check if there are any inaccuracies and research ways you can reduce your water and electricity expenditure, for example, switching to pre-paid electricity or using a timer to automatically turn your geyser on and off. 

5. Monitor your cellphone data usage. Check for any unnecessary charges and look into different cellphone contracts to see where you can get bang for your buck. 

6. Brainstorm ways you can pare down your car and/or travel expenses. Perhaps you can find an alternative way to travel to work (like buddying up with a colleague to save petrol) and/or reduce the number of times you go on an expensive family holiday. 

 

Growing your financial well-being one decision at a time 

We hope the strategies laid out in this blog are insightful and inspire you to create a stress-free life of financial abundance! If you need any assistance on how to begin managing your debt, do not hesitate to reach out – our team of professionals are here to help you.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

Start managing your money better with Debt Restruct today