10 savvy strategies to slash your living costs

We’re all feeling the pinch in our pockets as food, electricity and housing prices soar and interest rate hikes become the new norm. While there has been some reprieve, many South Africans are struggling daily to make ends meet. When making it to the end of the month feels near impossible, savings are the last thing on our minds.

“The rising cost of living is seeing people scale back wherever they can, setting budgets to manage expenses, starting side hustles and going without anything that isn’t a bare essential,” says Joe Szemerei, chief operations officer (COO) of financial services company, Indwe Risk Services (Indwe). “This means that we are all looking at where we can save and what we can do to make the situation more manageable.”

According to a PwC Voice of the Consumer Survey 2024, 77% of South African consumers expect the biggest increase in their consumer spending to be on groceries, 75% of consumers believe inflation is the number one risk that could affect the country over the next year, followed by macroeconomic volatility (55%) and social inequality (40%).

Saving can be difficult, however, according to Szemerei, there are certain expenses that you can significantly reduce by implementing a few smart habits, namely:

Transport: Petrol and transport costs add up quickly, and even though prices are currently decreasing, prices are still higher than they were in 2023. To save in this area, you can try to reduce your mileage by car pooling or ridesharing where you can. Some insurers also reduce your premiums if you drive less, so be sure to check if your insurer does. Keep your car serviced and maintained to ensure it is running at its most efficient.

Groceries: The total basket cost has gone up. Many food basket items have seen year-on-year price increases, making even basic foods out of reach for many consumers.

To avoid overspending on groceries, draw up a weekly food menu and buy your groceries accordingly. This also helps you avoid impulse purchases. Be sure to take advantage of special offers or loyalty savings to stock up on non-perishables.

It might also be worth your while to assess your food choices as some foods are far more expensive than others.

Electricity: In July this year, Eskom’s electricity tariffs increased by between 12.72% and 12.74% which saw the average increase to urban tariffs at 13.29% due to the increase in the affordability subsidy charge.

While South Africa has been enjoying far less load-shedding this year, consumers have been hit hard with these increases, adding yet another burden on their already overstrained pockets. To save some money on the electricity front, do some research to see if solar is a viable option for you. Otherwise, you can try to switch to energy-efficient appliances and lightbulbs, turn off unnecessary lights, and consider switching to gas for your cooking needs.

Living space: This has also become a financial concern for many. The impact of ever-increasing interest rates left many homeowners with no choice but to downscale. While this may seem like the best option for many, it is important to take into consideration that smaller properties in complexes and the like often come with levies and hidden costs that could soon see you out of pocket, too. Be sure to research all expenses you will incur before you decide to make that move.

If your home has extra space, you can also consider renting out a room or cottage for additional income – remember that it will incur additional taxes, too.

Insurance and medical aid expenses: Financial dire straits often see people resorting to cancelling their insurance policies to help ease their load. “This is an incredibly dangerous thing to do as it could expose you and your family to financial ruin,” says Szemerei.

There are, however, a few ways that you can reduce your premiums while making your insurance work for you:
• Get quotes on your homeowner insurance and compare that to what you are currently paying through your bank or bondholder. Switch your insurer if need be.
• Insure all your assets with one insurer to simplify the process and enjoy a potential discount.
• Reconsider your excess options and increase your excess payable to lower your monthly premium.
• Making annual or biannual payments often results in a discount through your insurance company.
• Review cover amounts regularly to keep track of policies and cover, especially if your life or circumstances have changed.
• Reconsider the efficacy of policies. Are they still relevant and will they achieve the intended outcome should something happen?
• Reconsider your insurance covers to ensure that all the potentially catastrophic exposures are covered first and properly. Then look at the items that are less crucial from a financial viability point of view and potentially remove those from your cover.

During challenging financial times, people are forced to adjust and prioritise where they spend their money. “It’s just as crucial to make room for savings and it is recommended that you speak to an adviser or financial planner for advice, particularly when you want to save on your insurance. It is possible to achieve your financial goals and live a good life. With the right advice and financial behaviour, it is within your reach,” says Szemerei. – IOL