YOUR
MONEY
SORTED
HOW TO CURB
HOUSEHOLD COSTS
It’s hard to imagine cutting back even more when our belts
are already so tight. As it is, 30% of employed urban house-
holds have fallen behind on paying household accounts in
these tough times, according to the 2019 Old Mutual
Savings and Investment Monitor.
Your Money went in search of more ways to reduce
monthlyexpenses.GETHELPHERE
By LETITIA WATSON
Send suggestions for topics and requests for info to [email protected].
We may answer your questions in this column but won’t reply personally.Shoparoundwithvariousinsur-
ers and find out if you can get
a lower premium for the same
cover on funeral, household
contents, car and building
insurance.
Many people don’t do this
because they think it’s too much
trouble but the process doesn’t
take long. A broker can do a cov-
er and premium comparison for
you or you can call a few insurers
and find out what they charge.
Websites such as hippo.co.za
and bettercompare.co.za also
offer these services.
You can also look at the
excess on your car and home in-
surance – that’s the amount you
must pay out of your own pocket
before an insurer pays out a
claim. The higher the excess, the
lower the premium.
Ask if you can increase yourexcesssothatyourmonthly
premium is less. You’ll have more
to pay in the event of a claim but
it’s a calculated risk that could
save you hundreds of rands
every month.
If you still have the same car
as last year, you need to adjust
the insured value. Your car loses
value as it ages and you need to
adjust your insurance – the in-
surer won’t necessarily do it
automatically. If your car is
worth less, your insurance
premium should also be less.
Most insurers will give you
a discounted premium if your
household goods, buildings and
car are all insured by the same
company. If you’re insured at
different companies, find out if
you’ll get a discounted premium
for the same cover if you move
all your policies to one company.1
REVISE YOUR INSURANCE
Youdon’tautomaticallyhaveto
stay with the same service pro-
vider when your contract runs
out. Compare all the offers in
the market.
If you pay R150 a month less,
it works out to a saving of
R3 600 over 24 months.Also,don’trushtoget a new
phone every time your contract
is up – if your existing phone
still works, keep it and just get
a data or airtime package.
These packages cost less
because you’re not paying off
a device.3
REVISE YOUR CELLPHONE
AND DATA CONTRACTIfyouhavea homeloanandyour
record shows you faithfully pay
the full amount monthly, your
bank might be willing to bring
down your interest rate.
You could also find a better
interest rate if you move your
home loan to a different bank –
one reader did that and brought
her interest rate down from
14% to 11%.Justrememberthereare
costs involved when you move
your home loan, such as the
reregistration of the bond, but
the bank giving you the bond
might be willing to give you a
discount on such fees.
Make sure the lower interest
rate will compensate for any
fees you might have to pay – the
bank can help you calculate this.2
NEGOTIATE YOUR INTEREST RATE
It’sincreasinglycostlytopay
off a car, drive it and maintain it.
Wesbank’s mobility calculator- which measures how much car
payments, petrol, insurance and
maintenance cost a month –
found the average car owner
spends R7 851,39 a month.
That’s 3% more than last year - and a whopping 28% more
thanfiveyears ago.
The largest chunk of the
monthly cost is the repayment
on your vehicle.
Consider trading your car in
for a more affordable model
that’s lighter on petrol. The
monthly savings can add up to
thousands over the repayment
period.4
RECONSIDER YOUR
CAR REPAYMENTSSThe ombudsman for short-term insurance: osti.co.za or 0860-726-890
SThe Financial Planning Institute has information about accredited brokers
(www.fpi.co.za), as does the Financial Intermediaries Association of Southern
Africa (FIA) at fia.org.za.
SFor general financial tips, go to http://www.fscaconsumered.co.za48 | 29 AUGUST 2019 you.co.za^
YOU LIFESTYLE