Nicola’s Notes: #Elections2016 and your pocket
The rand recovered on #Elections2016 sentiment, but that’s no reason to rush out and splash your cash, writes Nicola Mawson.
|||International investors must be liking what they’re seeing as election votes are almost all in because the rand has moved to a nine-month high, trading at levels last seen in October (before what people are now calling Nenegate).
South Africa’s 2016 municipal elections were closely watched by the international community, with ratings agencies also keeping a keen eye on the results, as investors and the like are hoping for economic change - change that will pull us out of the doldrums.
Will that happen? I don’t know. I certainly won’t hold my breath (I’d just turn blue and pass out).
I don’t imagine that these elections will be enough to ward off a technical recession that many are warning about.
Nor will any change make a huge difference before SA’s rating is reviewed - and possibly downgraded to junk - in December.
We still have a tough time ahead of us. Retrenchments are the order of the day, inflation seems to be out of control regardless of what Stats SA says, and interest rates are on the up-and-up.
Even the minimal relief of petrol being 99c a litre cheaper is little comfort when fuel stations are running dry and you can’t fill up at cheaper prices.
There’s going to have to be a lot of belt-tightening for the next while as we try to stay afloat. But, hey, we’re South Africans, we can do it - we have the ability to pull together and ride out the storm.
So, here’s my 2c on how you can cut back on spending and - hopefully save. (We shouldn’t have just July as savings month, it should be inculcated into our culture.)
Savings tips
* For some reason, vegetables are increasingly being sold in bulk and, thanks to the drought, are going off quickly because they’re not at the usual quality. Club together with a friend to split the haul, and the bill. And shop at a greengrocer.
* Meat is getting ridiculously costly, find a local butcher (local is lekker) that is cost effective and stock up on specials. Again, splitting your freezer with a pal will help you both out because meat tends to be cheaper in bulk.
* No-name brands are often cheaper than items in pretty packaging. However, this isn’t always the case. Look at the unit cost (or use the calculator on your phone to work it out) to save. Incidentally, Pick n Pay’s home brand of spaghetti is made out of bread flour, so if you don’t like that, stick to a name you know.
* Look for buy-two-get-one-free specials for items that won’t spoil. This helps with cash flow next month as well.
* For home loans, move your debit order date a bit earlier, say just after payday instead of the 1st of the month - you’ll save because the compound interest is calculated daily.
* Also, have an estate agent around to revalue your house; if the equity has increased, ask your bank to re-rate it. Even just 0.15 percentage points can mean a couple hundred extra in your back pocket.
* If you can, lift club with a mate wherever possible.
* Can you change your work hours to avoid traffic? That could mean as much as a tank of petrol less each month.
* Talking about cars, does yours have to have 95 octane? Check with the manufacture or in the manual and, if not, drop to 93 where possible; it’s cheaper.
* It goes without saying that a budget you stick to is a must, but do you know just how much is spent on little extras, like that cup of java? Sign up for something like 22seven so you can see where your money really goes.
* Also consider buying second-hand, and avoiding getting that couch on the never-never.
Now to cut debt
The next trick is what to do with the spare cash you (should) have at month end; here are a few ideas.
* Pay off your debt with the higher interest rate first. Sure, it’s not the same as tackling a small amount that is paid off quickly and then makes you feel good, but the long-term happy rush outweighs this.
* Shop around for a better interest rate. If your credit card was issued before the National Credit Act came into force, once it’s paid off, ask your bank if it makes sense to close it and open another one at a lower rate. If you inked that deal post the NCA, your bank should be able to improve your rate anyway.
* Better yet, don’t use the card except for emergencies - it’s a limit, not a target.
* If you own a home, put spare cash into the bond. Ooba says an extra R200 a month cuts the bond term by a year.
* Save, save, save. We all have to retire one day, and no-one thinks a 65-year-old street walker is attractive.
* Get a financial advisor, they are full of useful information.
Do you have any other tips or ideas? Feel free to drop me a line with your suggestions on how else we can pull together and beat the blues.
* Nicola Mawson is the online editor of Business Report. Follow her on Twitter @NicolaMawson or Business Report @busrep.
nicola.mawson@inl.co.za
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