When exploring ways to save or earn a little more money becomes more work than it’s worth, it’s time to re-evaluate your thinking. Saving money should be simple and when it’s not, we don’t often follow through. That’s why we’ve put together a few of the easiest ways to save, starting right now. These tips leave you with extra money, without sacrifice.
Negotiate your expenses
One way to save money easily is by negotiating for a lower rate on your internet bill, cellphone contract or gym membership. You might also be pleasantly surprised at the alternatives available which you can use to your advantage when negotiating.
Remember, things aren’t set in stone. A simple conversation done the right way (being polite and friendly towards the person you’re dealing with) could drastically lower how much you pay.
Make a list of your top five expenses and then set aside an afternoon to give those companies a call. Ask if there are new promotions available and don’t hesitate to bring up a competitor’s offer, as they might be able to match it.
Although it takes time and can be draining to convince a customer service representative to offer you a better deal, you could end up saving a lot of money if it works in your favour.
Refinance your loans
If you have any form of debt – a bond, student loan or vehicle loan, for example- refinancing could be the easiest way to save. Refinancing is all about replacing your existing loan with one which is more affordable. In the current low interest rate environment, refinancing could leave you repaying a lot less on your loans.
Rank your loans from their highest to lowest interest rate. Then, perform a quick search online to see if the current rates offered are lower on a similar loan. If the difference is large, it’s time to refinance.
Changing to a new loan will incur costs but these costs are often worth paying if the interest rates differ greatly. We’ll explain how refinancing can work in your favour with a simple calculation:
- Find out what your loan balance is. In our example, we’ll assume that we have R12,000 which needs to be repaid over the next 12 months – this translates to R1,000 per month.
- Add up what the payments with the lower interest rates could be, plus what it’ll cost you to change to the new loan. We still owe R12,000 but with our newly refinanced loan, we may only need to pay R800 per month (a saving of R200 per month). R800 x 12 months = R9,600.
We also incur loan initiation fees of R1,000, If you add the R9,600 and the R1,000 we get an amount of R10,600. This translates to saving of R1,400 by merely taking advantage of the lower interest rate!
This example is very basic but it can give you a good indication of whether refinancing may be a good option for you. In our case, our savings comes to R1,400 over 12 months.
Save money without making huge sacrifices with these two methods. They may require some effort now but your future self will thank you for it.