There comes a time in life when most of us have to live on a tight budget. This is usually due to circumstances or it is self-imposed. You might want to live frugally for a few months because you are saving up for something or because you are going through a tough time. Sometimes we live on a tight budget because we have made a lot of financial commitments like debts and investments. This is a guide on how to live on a tight budget in South Africa.
1. Track all your expenses
A lot of people tend to track the big expenses, they don’t bother with keeping track with the minor ones. Minor expenses add up to be a lot, know exactly how much money you need to maintain your current lifestyle.
This includes keeping track of the amount of money you spend on food and things like airtime. People barely keep track of the amount of money they spend on airtime on a monthly basis. A lot of people spend around R300 to R600 on airtime without even realizing it. Spending R600 a month on airtime means you are spending R7 200 in a year just on airtime.
This is money that could have gone towards other things, again, minor expenses add up to a lot in the long run. Track the money you spend on ice cream, fast food and other expenses.
2. Cut back on expenses
A lot of us are spending a lot of money on things that we can do without. Cut back on all the expenses you can do without. You can survive without fast food and you can spend a little less on airtime.
Cutting back on expenses will give you a breathing room, don’t aim for the big expenses at first. Aiming for the big expenses will make it feel like you have changed your life dramatically, aim for the smaller ones. Don’t buy food that you don’t need, try to reduce your electricity usage. Only buy things that you really need, cut off everything that you can do without.
If you can avoid doing braais or unnecessary travels then cut off on that too. Other things that seem minor but contribute to our expenses are the things we are subscribed to. A lot of people pay monthly subscription fees for things that they don’t really need. Cancel unnecessary subscriptions and memberships.
3. Change your accommodation
Accommodation is one of the biggest monthly expenses for most of us, it’s like that throughout most of our lives. Changing your accommodation might not be easy if you have a family but it’s something you should consider if you are single. There is no shame in moving from an R8 000pm apartment to a R4 500 pm apartment.
A lot of people are hesitant when it comes to changing their accommodation because of what other people might think. Sometimes only a change in accommodation is needed in order to live comfortably and not on a tight budget.
4. Save money
You can’t live on a tight budget forever, that’s just not a good way to live. There is a difference between living frugally and living on a tight budget. At least 10% of your income should go towards savings. You can use this money to pay off your debts, which should be your number one priority. The money can be used to generate more income in the form of a side hustle or passive income.
5. Take advantage of sales
Some people just buy groceries without knowing whether the items are on sale or not. This is something that is particularly done by people under 25 years. They just decide to go and buy groceries on a certain day and pay whatever price there is for that day. You can save a lot by waiting for certain items to be on sale, not only that but compare the price of groceries from supermarket to supermarket.
You can usually find this information from your local newspaper or the internet. Sometimes goods costs more from other shops and just comparing prices will save you a lot of money. These savings might not be immediate but will show over the long run.
Conclusion
This was a guide on how to live on a tight budget in South Africa. Living on a tight budget doesn’t have to be depressing or boring; there are a lot of fun activities you can do that don’t require money. Do you have any thoughts or questions? Comment below.
