How to take a scalpel to your budget

When we talk about saving money, we usually mean we intend putting some of our cash into a dedicated savings account.

However, we can also save by reducing interest rates and being smarter about how we spend our money.

There are several ways to cut back on our existing budgets, although it may require a change in our spending habits.

Here are some adjustments that you can make to save a little more:

Go out less. You can save a lot of money by limiting the number of times you eat out.

But if you absolutely must go out, take along a picnic rather than going to a restaurant.

Create weekly meal plans. These make it easier to work out exactly what you will need to buy for the week ahead, and doing so eliminates the chances of your walking into a store and picking up unnecessary items.

Have a shopping list and stick to it. Before you go to the shops, open your cupboards, check what's missing from your meal plan and make a list.

Choosing whatever catches your eye when you're in a shop usually leads to you spending a lot more that you intended - and you often forget the very thing you went there to buy in the first place.

Don't spend money you had no intention of spending. It's not a "saving" if you're buying an item you did not plan (or need) to buy.

You have not saved 50% on that item - you've spent money that you could have used for something essential.

If it's practical, buy in bulk. Non-perishables such as cleaning materials, canned foods and anything that can be frozen for long periods, as well as dry food such as rice, pasta and mealie meal, can be bought in bulk and stored. Take a leaf from the books of year-end stokvels.

When it comes to perishables such as fruit, milk and other dairy products with an imminent expiry date, don't be wooed by "three-for-two" specials, especially if you live alone. If you don't need three bottles of fresh milk that will expire soon, don't buy them. You'll only end up throwing two away.

Save money on credit. When it comes to saving money on credit, go for the lowest interest rate you can find.

Take advantage of interest-free periods for any credit that you take on and avoid extending repayments beyond that period.

Pay for convenience, but only if it's necessary. Check your bank charges. Do you use the features that come with your particular account? Is there a cheaper option? Perks may be great, but are they worth paying for if you never use them?

Pay cash for purchases under R100. Most banks don't give you banking notifications for spending less than R100 at a time.

Paying cash will help you keep an eye on how much you're spending on the small things.

Little purchases of R20 or R50 throughout the day on small items such as coffee and take-away lunches can easily add up to R500 or more a week, which would otherwise fly under the "swiping" radar.

Reduce high-interest debt. Tackling expensive debt first is another way you can save.

The longer you take to pay off a debt, the more interest you're charged.

Understand compound interest charges. Compound interest is interest that is charged on both the principal loan or investment amount, as well as the accumulated interest.

The value of interest that is compounded every day is different from the interest charged on a monthly or bi-annual basis.

Before you sign any documents, ask how often the interest that you will be charged is compounded.

The person helping you should be able to assist.

If you're applying for a product online, rather call or e-mail the service provider before you commit to anything.