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This is how you can stretch your finances

Budget – and cook more meals that will last for the week.
A modern-day strategy can benefit from old-fashioned tips and tricks, such as the use of shopping lists and the ‘envelope system’. Image: David Williams, Bloomberg

With the easing of lockdown regulations and many industries able to resume operations, you may feel the worst is over and that soon the pay cheques that were cut and the work opportunities that disappeared will return to normal.

Unfortunately, extensive damage has been done to the economy and it will take time to recover.

The pre-existing dire economic environment, worsened by the Covid-19 lockdown and resultant income instability for many, requires consumers to cultivate good money management habits, focus on essentials, curb unnecessary spending and pay off short-term debt as soon as possible, while trying to survive.

According to the Pietermaritzburg Economic and Justice Group, the cost of a seven-member household food basket is R3 413.14 per month, with the core foods (maize meal, rice, oil, sugar and so on) costing R1 407.18 – up 11.7% from July 2019.

Read:
Covid-19 to change how people spend money
Kick your finances into shape this year

A little planning can go a long way

DebtSafe debt advisor Carla Oberholzer says there are often ways to reduce food expenditure and the most important thing to do is budget. 

“The ideal budget amount for groceries [luxuries like takeaways excluded] per head per month should be between R800 and R1 000,” she says, advising consumers to set aside money every second month for cleaning products that need replacing.

She says the ‘envelope system’ also works to keep consumers within their budget while shopping.

“If you tend to exceed your grocery budget, only take the specific cash amount needed with you. Do not use credit or debit cards for your monthly outing to the grocery store, to avoid buying what you want and not what you need.”

Oberholzer says that without a shopping list consumers are heading for trouble; this goes hand-in-hand with planning essential meals. 

“Plan your meals two to four weeks in advance and have a lookout for deals [such as ‘two for the price of one’], clearance items and other specials on items you need. By planning and keeping track of your freezer and pantry items you can avoid those extra trips to the store as well.”

She adds that parents should take care not to let children influence their purchasing decisions while at the store, especially when it comes to items not on the shopping list.

She also suggests buying in bulk. 

“Just make sure it is a good price. And cooking in big batches can add a few meals to the freezer for the rest of the month’s dinners.”

Oberholzer also mentions no-name brands. “Don’t think you won’t save on those. No-name brand beans or tomato and onion cans can keep the grocery bill in check.”

Large households can make meat go further by using it in stews. “Stews allow you to buy your meat in bulk, and you won’t need to buy a thick, expensive piece of meat for every person.”

Time to review spending habits

FNB consumer education programme manager Dhashni Naidoo says this is a great time to relook not just budgets but spending habits too.

“Plan how to use resources sparingly without wastage – for example cook cost-effective, healthy meals and make enough to enjoy more servings later to save on ingredients, time and electricity.

“You can freeze some of your fresh ingredients and meals to make them last longer and you won’t have to make repeated visits to the shops, which may expose you to impulse buying,” Naidoo says. 

Managing electricity usage by switching off all appliances that are not in use and trying to do laundry in bulk rather than washing just a few clothing items will also help.

“When using electronics such as computers, plug them in when the battery appears low and unplug them once they are fully charged,” Naidoo says.

It’s difficult to manage the use of data during lockdown as people use it for work, school, entertainment, and to stay in touch with friends and family. But Naidoo calls on consumers to be conscious of their usage and the cost.

“When you are not using data, switch off the use of data on your device and only switch it on when you need to use it again.”

Lockdown does result in some savings …

With movement limited during lockdown, some cash is freed up from costs associated with transport, fuel, takeaways, entertainment, everyday coffees and other daily habits people usually spend money on. 

“Try saving this money in a separate savings account so that it can grow by earning interest,” Naidoo says.

Remember, nothing can compete with a nice home-cooked meal – and don’t forget to take some shopping bags with you to the store.

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Great article. We need more of these to help us all.

Other tips – check your cell phone bill for spurious extra costs added by the cell company. Check if your phone contract is expired and keep the phone but change to sim only. If anyone has data left towards the end of the month – hot spot to that phone rather than buying more data.

Grow some vegetables in the garden. Spinach is easy.

More tips please

Check your short term insurance.

Mine went up at a rate of between 20 and 25% per year. I got new quotes and got a saving of 40%

Guess who the cheapest was?? The same company that increased my insurance by that much.

Strange? No wonder the boss has a “bespoke” Rolls Royce.

Don’t buy a new car,coffee,tea,gas cooldrink,sweets,cigarettes,alcohol,magazines -cancel dstv.use the kettle less,turn down the heat on your geyser.dont cut the grass every week- was wondering how much money does a person spend on a garden in a year? One day (lol) when i can buy a house, ill just put in plavei-stene , and no garden.

In other words, stop living and just survive…

Nothing like everyone cutting back on their spending to get the economy going again. This may seem like a good advice for the individual, but not for the economy. We forget that our expenses are someone else’s income. For example we can all go for DIY haircuts but that puts hairdressers out of work, which means these people won’t be letting a shop, which hurts the landlord, which curtails property investment, which curtails lending etc etc. Repeat in all spheres of the economy.

This is not the time to save, this is the time to spend.

Congratulations for not getting a pay cut, losing your business, getting retrenched or forced to retire early.

Congratulations on a great article. I agree: We need more of these type of articles that can make a real difference in everyone’s daily lives.

Here are some more useful tips: https://www.youtube.com/watch?v=n6IJJJpzt8s.(for singles, substitute tip 2 with: In 2020, live on you 2017/8 income, and save/invest the difference.

This reading list could also get you in the right mindset:

The 7 habits of highly effective poeple – Stephen Covey.
Why people fail – Siimon Reynolds.
Stop acting rich – Thomas Stanley.
The Millionaire Mind – Thomas Stanley.
The Millionaire next door – Thomas Stanley.
Coach Yourself to Wealth – Martin Hawes & Joan Baker.
The Richest Man in Babylon – George Clason.
Poor no more – Tracey Davonport.
Sow and grow your own Money Tree – Johan Dippenaar.
Swimming against the stream – Tim Waterstone.

These books should change your life for the better.

LOL keeping your food bill between R800 and R1000!! Are you eating Mealiemeal porridge the whole day, everyday then?

Thanks for the advice, I am going to cancel my MoneyWeb R63 subscription now. Who needs archived articles anyways.

Great… do you feel better now?

it’s definitely good to work on a budget for household expenses and keep a record of what you are spending, a simple spreadsheet is easy to use. check your credit card or debit card statement, I’ve been fighting with a major retailer to credit my account for a double debit, which mysteriously can take 8 to 10 working days to be reversed!

BUY A SLOW COOKER A VERY LARGE ONE AND MAKE 3 – 4 MEALS AND THEN VACUUM PACK (VERIMARK) AND FREEZE. There’s a tip from Uncle Z

End of comments.

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