We’re always being told we need to manage our money better but, if it was easy, more people would be rich – right? And if you think about it, it doesn’t have to be that hard; in fact, the hardest part is actually just getting started.  

Here are a few steps you can take in order to make your money last a little longer.

Step #1: Tally up your expenses

The first step to start saving money is to figure out how much you spend on a monthly basis. Keep track of all your expenses – that means every coffee, lottery ticket and cash tip. There are a number of useful apps to help you with this.

Once you’ve tallied up all your expenses, organise the numbers by categories, such as petrol, groceries and loan repayments, and total each amount. Use your credit card and bank statements to make sure you’ve been accurate and haven’t left anything out. Another important thing to do is to categorise your expenses by importance so, in other words, make sure things like household expenses, car insurance and medical aid are sorted out first before looking at the less important expenses like your daily coffee shop visits and takeaways on Fridays.

Step #2: Make a monthly contribution to savings

Once you have an idea of what you spend on a monthly basis, you’ll have a better idea of what to cut back on. Your budget should outline how your expenses measure up to your income – so you can plan your spending and limit overspending. This way you can put some money away towards savings or investments at the beginning of the month, without worrying that you won’t have enough left to see you through the month.

Step #3: Avoid overspending

If your expenses are so high that you can’t save as much as you’d like or, even worse, that you’re spending more than you earn, it may be time to cut back. This means packing in your own lunch for work instead of buying a meal at the shop every day. You should probably also cut back on your entertainment expenses, so maybe skip a fun night out with your friends every now and then. Or opt for the burger and chips rather than that lavish seafood platter.

Step #4: Set goals for yourself

One of the best ways to save money is to set a goal. Start by thinking of what you may want to save for – perhaps you’re getting married, planning a vacation or saving for retirement. Then, figure out how much money you’ll need and how long it might take you to save it.

View your savings contribution in the same way you see your monthly rent or insurance premiums; a fixed expense you pay at the start of every month. If you only save what’s left at the end of the month, it will be way too tempting to spend that money on other luxuries during the month. Another great way to save some money is via your reward programmes. Some of these give customers money back for good habits – for instance, MiWay Blink provides a monthly cashback on the insurance premiums of a client who has driven under a certain number of kilometres the preceding month.

Step #5: Watch your money grow!

Last but not least, review your budget and check your progress each month. Seeing your money grow is encouraging and will help you stick to your personal savings plan. It will also assist you in identifying budgeting problems quickly so that you can change up your budget accordingly. Understanding how to save money may even inspire you to find more ways to save and you’ll see yourself reaching your goals that much faster. Saving money will enable you to achieve long-term goals like putting down a deposit towards your first home or adding to your retirement savings. The more money you save, the greater the future reward.

MiWay Blink is a division of MiWay Insurance Limited, a licensed non-life insurer and Financial Services Provider (FSP 33970).