Save money by banking better (more cash for you and the kids!)
Off the top of your head, do you know how much you pay each month in banking fees? Do you know how much interest you earn on savings? How much interest are you paying on your credit card?
To be honest, I wasn’t sure of my numbers until I started working on this piece. Picking through my statements and seeing what was going where, I realised that I was paying more bank fees for the service I got, plus the rewards. For me, the extra money each month was worth it. But, are you getting the best rates? How much could you be saving if you nipped and tucked things a bit, or even moved to another bank?
Changing banks might feel like too much of a mission with all the admin and moving over of debit orders, but these days banks will do a lot of the “work” for you. Research shows that many people will open a bank account with one of the traditional South African banks when they’re young and never think about other options again, even when they apply for credit or take out a fixed deposit. So, while you’ve been a loyal member of a bank since you were a tween with that cool ATM card and wallet, it doesn’t mean you have to stay there.
As we get closer to the end of the year, it’s important to think beyond the holidays and Christmas. Think about how you can bank smarter if you want to save money, make the most of your current savings, or manage your debts a bit better.
First things first — look through your statements and see what you’re paying for. Do you have an overdraft or credit card that you don’t need, but which you’re still paying for? Do you feel your monthly fees are too high? Could you get a better deal somewhere else? How much interest are you getting on your savings account? What if you put your savings into some kind of investment account for better returns?
Shop around — there might be better options available, meaning that you could be paying less in fees each month on that overdraft or credit card. Ensure you’re getting the lowest interest rate, which could make a big difference in how much you end up paying back.
Similarly, if you’re looking to make an investment, you want to make sure you’re getting the highest interest rate possible so that your savings will grow faster. Even if you have an account other South African banks, you can still choose to take out a loan or put money into an investment account at another bank, if it offers you better rates.
It’s important to make sure you use your bank account correctly to avoid penalties. Not having enough money to cover your debit orders, for example, can result in expensive fees.
Change is hard, and asking your bank questions can also be intimidating. However, remember that you’re not here to service your bank. Rather, they should be working hard for you and your money so that, hopefully, you can afford life’s necessities and still save some cash for the future.