Welcome back to Tebogo’s Story on how he has transformed his finances. In this post he shares some great tips on how to save more money! We all need that. So take a look at how an ordinary guy manages hs finances and saves more money.
Tebogo is a reader of this blog and recently sent me an amazing email sharing how he managed to transform his finances over the past few months. It was so awesome to hear from someone who’s just realised that things are wrong and that he needs to take charge of his money.
Previous posts from Tebogo:
How to save more money
In this part of the chat Tebogo shares what he did to save extra money. From paying off his car, cancelling some policies and negotiating his insurance policies. Have a listen to these great tips and see if you can do some of them yourself.
Take a listen here:
The most important tip to take form this is that any money saved is truly saved! Don’t be tempted to spend more money as soon as you have freed some up!
The Savings Snowball
You may have heard of the “Debt Snowball”; it’s a method of paying off your smallest debt and then using the the money you were paying towards the debt, along with any extra, to pay off the next debt. Thus, each time you pay off a debt you have more money to put towards paying off the next one.
The Savings Snowball is just the opposite! It’s a method whereby you save more and more!
The snowball effect really works like this. Using the tips below, start with what you think is the easiest place to save a small amount of money, even if it’s just R50. You now take this money, along with the new confidence and motivation you’ve got from saving money, and you find another area to save little more. Instead of spending any of the newly saved money, you keep building on the momentum and each time you save more, you’ll find that you’re more confident and more excited about the process!
Another practical way to save is by starting the 52 Week Savings Challenge! This requires you to find money in whatever way you need in order to make each weeks savings goal. If you do the challenge in the standard way whereby you save R10 more each week, you’ll see the snowball effect taking place.
So where can you find extra money and how can you save more?
Step 1 – Understand what you are paying for
The first thing to do is to look at all your automated payments that come off your bank account. List them and find out what they are for. From insurance policies, gym memberships, old phone contracts that you’ve possibly forgotten about, funeral policies, etc.
Write them all down and then start looking at the details. Find out what you are actually paying for. If you’re looking at a cellphone contract, write down what you’re actually getting in terms of airtime, data, and any extras. For insurance policies note down the important details and optional extras that you’re paying for, as well as the services that are included for free.
Once you’ve got all the details, really analyse all the contracts and see if there are any that you can cancel simply because you don’t use or need them. Also, see where you may be paying more than one company for the same type of cover. You could for example be paying for a 24-hour vehicle emergency service via 2 or more policies. It’s also easy to be paying for more than one funeral policy when you probably don’t need to. And there may be charges related to receiving printed and posted statements when you could really just opt for emailed statements.
Step 2 – Cancel unnecessary policies / memberships
Now for the fun part, start phoning the companies where you can cancel policies and memberships. You’ll find that they don’t want see you leave and you’ll probably be offered discounts or extra benefits to tempt you to stay. However, stay strong in your convictions and cancel unnecessary things.
Step 3 – Negotiate your insurance policies
After cancelling policies and memberships that you really don’t need, you can now start negotiating the ones you do need. Contact your existing insurance providers as well as others and see what better deal you can negotiate.
You should know your facts in terms of when you last claimed, whether your car is paid off or not, who the main driver is, etc and see if there are areas where your policy can be changed.
Bear in mind that you should always remain polite and friendly during these conversations. It’s really not worth it to get upset or to shout at the poor call service agent on the other side. Sometimes companies are not willing to negotiate a better deal, and that’s okay. You may not be successful with every call, as long as you try.
Step 4 – Check you bank account
Finally, a really important habit to form is to check your bank statements. This can be done weekly or monthly. You’re simply looking to confirm that the automated payments are really what you’ve agreed to. And if you see incorrect values you should phone your service providers immediately!
Also check out for fraudulent transactions that could be taking off small amounts each month. If you don’t look out for them you may be losing out!
Here is the Financial Loans course that Tebogo took to learn how to do financial loan calculations and how to get the facts on how munch money and time can be saved by paying a loan off early.
The next (and final) post is all about motivating others to join this awesome journey of taking charge of your money! Listen to Tebogo talk about how he shares his knowledge and motivation with others at the office.