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Personal Expense Trimming
#1
Hey all,

So over the last couple of months I have been looking at small ways to decrease my monthly expenses. At this point in time all of my extra money is going into my bond with the aim to pay off my house over the next three years if all goes well, if I can manage that my bond will have gone from 100 to zero in just 6 years! Big Grin

For those who have bonds, what are your interest rates if I may ask? My bond is with ABSA and is currently sitting at 10.6%. My next stage of savings is trying to see if I can get this reduced by at least 0.5%.

Second to this I am looking at changing the banking plan that I am on and it looks like this can save me a further R150 per month without taking away any of the facilities I am currently using. 

-EH

#2
9.85%. FNB and Nedbank came to the party, Standard Bank tried and ABSA...well, let's just say they don't want to do homeloans. Prime +2 something.

Anyway, sold my SUV and bought a Swift. Payments and insurance came down substantially. So if you're driving an expensive car that you really don't need let it go (after making sure it will actually work the way you planned of course).
IQ Test

#3
I don't owe anything on my car and not planning on getting anything new now, have three years left on my wife's car but it's s small car and the installments aren't that high.

Will phone around to the other banks to see if they can offer something worth moving for.

#4
A paid off car is the best type of car... Sad
IQ Test

#5
I'm with SA Home Loans. Paying 10.1% at the moment.

I tried ABSA and Standard Bank (my own bank) but neither were interested in giving me a home loan since my wife has her own business and is not salaried. FNB refused as well saying they only do home loans for clients.

Nedbank and SA Home Loans made me an offer but SA Home loans had the better interest rate, so I went with them.

#6
On the cutting of expenses:

I do not currently own a house yet, so I switched from Absa to Capitec for my banking (saved like R180 p/m).
I switched to Telkom Freeme from vodacom so there I save around R280p/m (vodacom contract used to be R599 p/m), the FreeMe 2GB contract is more than enough for me.
Next up is reviewing my medical aid, the thread from Ranger, made me think about my own medical aid (discovery, very expensive).

#7
My mobile is through my business so that is not a problem. I think we will get to a stage where everything moves over to data so you won't have a need for airtime, looks like this new Rain offering might be pretty decent, maybe have a look at their data prices.

Medical aid and other types of insurance is a tough one because it's something I think everyone hates paying but you can't really go without it. The trick is probably a balance, what you really need and can afford should be all that you have. There is no need to sign up to every second policy like for example having life insurance worth 10 bar if you only need cover for 2 bar. Still sucks paying it though.

#8
I also switched to Telkom from vodacom.

Had a 40Mbps VDSL line and cut that back to 10Mbps so saving some cash there as well and then went from uncapped to capped.

A big difference came by switching banks a year ago from Nedbank to capitec, seems me and James had the same ideas regarding phone bill and banks.

Now all my money is being put into my TFSA, Tax-free savings accounts are probably the best-kept secret for building wealth. I doubt there's a better long-term savings option out there.

#9
Why are tax-free savings accounts not more widely used then? I'm kind of pissed at my bank for not even offering me that option. haha

#10
A TFSA is more for the long term and I think a lot of the older generations are too old to take advantage of this. Also because if your TFSA is with equities, it is a lot riskier and most people cannot take on such a risk.

Furthermore, a TFSA is useless if you’re just going to be putting cash into it (if it’s a bank account with your bank)and trying to earn interest. This is because they normally offer low interest (5-6%) which could be outrun by inflation- meaning that you’re actually losing money. Also, you already get tax exemptions of up to R23 800 or so on interest per year anyways and I doubt the majority of people have enough cash to earn this much interest.

In order to take full advantage of a TFSA, you should have one with a unit trust provider or stock broker. Your gains and Dividends will then be tax free and this could lead to extremely large savings.

(Feel free to correct me if I’m wrong)

So I’d say be happy that your bank don’t provide one because this allows you to open up a TFSA with a different broker.






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