Following the excess amount of spending during the holiday season and along with the back-school essentials many individuals at the end of January fall into a less ideal financial shape.
According to Farzana Botha, Segment Solutions Manager at Sanlam Savings urges people to adopt the idea of frugal money during the month of February given that it is the shortest month in a year.
It is important to make a few small changes as it helps to sustain your finances and can therefore make a substantial difference in the long term.
“The Frugal February concept has been around for some time,” explains Farzana.
“The idea is to reign in your spending, entrench savvy financial habits and set your goals for the year ahead. Like a detox, but for your financial well-being.”
Top five tips on how to help you navigate Frugal February with ease and set yourself up for a financially confident future according to Farzana:
Find your budget leaks.
- Go through your bank statements to spot expenses that can be reduced or removed entirely.
- Ask yourself these questions: Are you spending too much on daily airtime or data purchases – would it be cheaper to buy larger bundles, less frequently?
- Consider pausing some subscriptions for the month or cancelling them altogether.
- Try freezing spending in one category for February, such as entertainment, take-out, or personal grooming.
Maximise your loyalty and rewards programmes
- The average South African belongs to more than 9 loyalty programmes. Check the programmes you belong to and spend the time figuring out how to take advantage of the benefits for everything from fuel to groceries, airtime and entertainment to cashback offers.
Be tax savvy.
- Maximise your tax-deductible contributions and get a larger tax refund. After all, who doesn’t like getting money back from SARS! If you haven’t already, consider opening a tax-free savings account (TFSA). You won’t pay tax on dividends or interest earned, and no capital gains tax is paid on the investment growth or when disinvesting. You can invest a maximum of R36 000 per year with a total lifetime contribution of R500 000, says Farzana.
Cook at home.
- Decrease your take away expenses and prepare food at home. This way it allows you to save money and time too especially during loadshedding schedules.
- Menu plan and make a detailed list of groceries you need and stick to the list when you go shopping. Better yet, shop online to avoid being tempted into buying items you don’t need.
Save with a goal in mind.
- Think about your financial goals – short, medium and long-term – and put plans in place to achieve them. If that sounds overwhelming, consider meeting with a financial adviser to guide you on this journey.
Other ideas for Frugal February include:
- Comparing prices on your current contracts vs. other providers – can you get a better price elsewhere?
- Renegotiate the interest rate on your home loan or car repayments.
- Ask your friends for free or low-cost entertainment ideas in your area. This could include hiking or exploring a nearby beach.
- Consider biking or walking when you can.
- Postpone renewing your gym membership and use free online resources for a month.
As you implement these savvy money habits, keep track of how much you save and put that money to good use.
Farzana concludes, “Some may find it easy to do this challenge alone, but there is no shame in needing help! If you do need guidance, reach out to a certified financial adviser. They can help you carefully plan your finances, considering your current and future financial needs so that you can move confidently into the year.”
