Cut out those small expenses, they add up

Your shopping must be made up of carefully calculated items you really need. /123RF
Your shopping must be made up of carefully calculated items you really need. /123RF

We often don't give much thought to the small expenses we incur over the course of the month as we regard them as insignificant amounts or see them as a little treat to reward ourselves for working hard for our money.

"Families usually budget for their monthly groceries but ignore small day-to-day items such as milk and bread or even buying takeouts on a Friday night," Happy Ngale, financial planner at Alexander Forbes Retail, says.

However, the reality is that small expenses add up over time, even if they're not an indulgence but a need.

Turning your small expenses into small savings starts with getting rid of bad spending habits.

"Start by making small, consistent changes and they will soon pay off. Also consider speaking to a financial adviser who may shed light on some of the habits you have but have not paid attention to," advises Zeblon Zibane, provincial general manager at Metropolitan Retail.

Avoid small spending errors

Buying small and often. Small purchase patterns can add up over a month. Rather plan ahead and buy in bulk.

Convenience over foresight

Having no tomatoes in the fridge should not be an excuse for a takeaway. Every time you choose the easy way out, you cost yourself money.

The more thoroughly you plan your expenses and stick to your plan, the less wasteful you will be in the long run.

Compare when shopping

Comparing prices between retailers will help you find specials or cheaper alternatives and make your money stretch further.

Forgetting that everything costs money

Falling asleep with the TV or lights on or a dripping tap in the bathroom may not seem like a big deal, but the costs do add up over time.

Not making saving a priority

Saving needs to be a mandatory expense item and not an option. It should be a regular in your budget.

Once you have determined your undesirable spending habits, the next step is to identify what you spend your money on but aren't budgeting for.

"These are usually nice-to-haves and generally people know this.

"The amounts are usually small like R20 for a cup of coffee or take-out occasionally," Viwe Dyasi, provincial general manager at Absa's Wealth, Investment Management and Insurance division, says.

"It may seem irrelevant, but a couple of these a month can be quite high in overall spend."

What you're most likely not budgeting for

Coffee. If you're a coffee fanatic, make sure to add it to your budget or, better yet, make your own great brew at home.

Alcohol, cigarettes and entertainment. A weekly budget will help you keep track of how many nights out, drinks and puffs you can afford.

Gym membership

If you're not going to the gym regularly, save the membership fees and hit the road for a jog and the park for a stretch.

Airtime and data

Try to assess how much airtime and date you typically use in a month and purchase at the beginning of the month.

Make use of public WiFi at every opportunity.

Medical expenses

Set up an emergency savings account for unforeseen medical expenses not covered by a medical scheme, and plan ahead for health expenses you know you will have, such as annual check-ups.

Turning the small expenses into small savings

Budgeting apps like those available from your bank or the likes of 22seven can help you identify small expenses, so that you can plan or save on them and use the cash for small savings instead.

Set yourself clear but realistic and achievable goals, and then stick to them to see a real difference in your finances.

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