Avoid Waste

Knowing exactly what income is coming in is not too difficult for most of us, however knowing every rand that is going out of our accounts is often a different story.

In order to be financially healthy we need to avoid waste. This means interrogating every debit order we have committed to, every policy we are paying for to make sure there is no duplication, and ensuring that all of these things which we are paying for are being used to their full worth.

I took some time to do this a few months ago, not only were there many things I was paying for that I wasn’t using but there were also things I was paying way too much for. After doing some online research on alternatives I made the switches that would still give me what I wanted but would save me an arm and a leg in the long-run. I also cancelled the things I was paying for but not using properly or at all.

I recently changed stockbrokers from standard bank to easy equities. Not only are all my transaction fees considerably less now, but there are no monthly administration fees which were eating away at my investments over time. I even had to pay over 300 rand just to transfer my shares from one stockbroker to another. These costs are not always clearly visible but once interrogated and adjusted they will save a considerable amount of money in the long-run. On monthly administration fees on stockbrokers alone I will save R960 a year.

Retirement annuities are another one; so many companies are notorious for charging huge amounts of fees just for investing with them. This is a type of policy that you are going to hold until you retire, and a company charging 2% in fees a year versus a company charging under 1% a year in fees is a massive difference. Look at companies like Sygnia and 10x who are disrupting the market because of the low fees that they are offering their customers. These are companies which clearly care about their customers and have their best interests in what they are doing. I feel much safer giving my money to these companies, knowing that their track record is good and that they are not ripping me off.


There are so many examples of this in our daily lives from as simple as looking who you are banking with to what credit cards and memberships you hold. Cutting out the waste you are over paying for will go a big way to ensuring you are financially healthy, allowing you to sleep better at night at the process.

Comments

  1. Nice post - just did a similar one on my blog is you interested in checking it out http://www.stealthywealth.co.za/2016/08/pruning-your-budget.html

    I think it is very important to go back to your budget every so often and get rid of the excess fat

    ReplyDelete
    Replies
    1. Thanks a lot, really enjoyed your post and blog. Will be sure to check-in in the future.

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  2. Thanks for a great blog. Do you primarily invest in direct shares or ETF's on the EasyEquities platform ?.

    ReplyDelete
    Replies
    1. Pleasure, thanks for reading. In the past I have invested a lot in individual shares so this is still a big portion of my portfolio (probably 50%), but since the TFSA was introduced in the last 2 years I have been putting most of my money into this on easy equities.

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