4 Smart things you can do right now to save money during SA’s deep Covid-19 recession

South Africa was headed for a recession way before Covid-19 turned everything upside down.

As a result, 2020’s prospects appear depressing. Planning for the future and saving can seem like an impossible task right now. However, with fuel prices dropping and interest rates slashed to historic lows – cutting back on expenses might be easier than you think, as we all look to ride out this pandemic and it’s blows to our economy.

Try these suggested to start making the best of a bad situation:

Evaluate your monthly budget Eating out at restaurants and other group entertainment options are a no go until Alert Level 1. Any extra money you have should be used to pay off existing debt – so you can reduce the interest owed and ultimately start saving money instead.

Set a strict grocery budget and stick to it. Food is one of the largest expenses of any household. If you want to save money, you’ll have to seriously rethink your shopping habits. Ditch the ready-made meals and buy ingredients in bulk instead. With everybody aiming to be Master Chef during lockdown – you can easily prep and freeze your meals so that you have cheaper homemade ‘ready-meals’ during the week.

Don’t fall behind on your mortgage payments

With a 2.5% slashed from home loans, currently at 7.25% - you can be putting that extra money to save. If you keep paying the overall R1 581 saved on your monthly bond payments since the rates put into effect since Jan 2020 -you'll save yourself some R379k in interest on a 20-year bond. Any extra money you can put into your bond will reap a long-term reward of note. SEE: Recent rate cuts shave over R1.5k off a R1m bond - but is it enough?

Downscale or tailor your assets to meet your financial needs

Reducing any principle debt is the ultimate goal right now. If you’re able to downscale either your property or car – now is the time to do that. Rather buy a smaller car or property to meet your current needs – so you can truly say you own it - and not the bank.

If you’re in a secure job and financially sound despite the current climate but you’re still renting – you might find that it is more affordable to buy a property than rent, especially for first time homeowners looking to invest in properties under R1m that do not carry costly transfer fees.

Review your insurance policies

Conditions for all insurance policies, from home to car insurances have all been impacted by the lockdown restrictions. While you might be tempted to cancel some of these – that is never a wise decision. Instead, get in touch with your insurer and see where and how you can get the best deal.

Right now you need to consider every possible opportunity to save, whether that be down-scaling on various cellular and mobile packages into one WFH fibre package for Zoom and WhatsApp calls only, or kicking your 'zol' habit and putting that cigarette money into a savings account. Bank interest rates on savings accounts are moderate but stable, otherwise, seek some sound financial advice when it comes to shares and other equity-linked investment plans for a more long-term plan. It's time to make this crisis and your money work for you.