Calc

some text

even more

a blog post

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Focus cost savings

What if I told you I was able to save 50% on my monthly cellphone, car insurance and life insurance bill? You may be well impressed?

What if I told you I was able to save 10% off my monthly grocery and household expense? Not bad, but not as impressive? Right?

Well here's where things get interesting....

The other day I had one of those realisations that seem so obvious in hindsight. The kind that comes to you as you are rinsing your hair in the shower. The kind that makes you feel stupid for not seeing it sooner.



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When looking at budgets, we are always asking questions such as, do I really need this, have I got the cheapest insurance, can I save on my bank account fees? The type of questions I mentioned in the post on pruning your budget /*/*/*/*/*/*/*/*/*/

The questions we should actually be asking is what is my biggest expense, and can I reduce it. You see a 10% saving on your biggest expense can far exceed a 100% saving on something like your bank account fee. So should we be spending hours navigating the spider web of banks and account fees, or is that time better spent on looking at ways to reduce housing expenses and transportation?

So the first thing to do is to find your biggest expense.




From time to time I visit our Budget - I am always questioning, always thinking, and always looking where to shave off some expenses. I must admit, it is already pretty lean, but it can't help looking for improvements and always trying to do better right?

I wrote about how to "Prune your budget" in this blog post/*/*/*/*/*/* last year. Now don't get me wrong, doing some of the stuff mentioned in that blog post is going to save you some money, and consistently saving that money over the years is going to put you in a better situation than you are currently. But maybe we are thinking about this the wrong way?


We have limited time, energy and in some cases patience - so surely we should be targeting our cost saving initiatives atthe "Big wins"? We should be focusing our efforts on achieving the maximum benefits for our time right?

Over your working career and lifetime, the small wins can save you maybe 100's of thousands of Rands, but big wins could save you millions. So with this in mind, the obvious question becomes - where is most of money going every month?

This may seem really obvious to some (maybe I am a little slow), and it kinda sucks that it has taken me this long to figure it out. But when I made this realisation I Immediately opened my budget and began categorising my expenses.


Where does the cash go, we wanna know! (Sing it like that epic line in the "rather interesting" movie Envy1/*/*/*/*/*/*/*/)



There is something that I have been giving some thought to over the last couple of months.



. It is always good to do some pruning of your budget, and everything you save can help. Don't get me wrong, trimming your insurance premium, cancelling your gym contract, and getting a cheaper cellphone contract definitely helps. But those are what I call small wins.

We have limited time, energy and in some cases patience - so should we not be focusing our cost saving initiatives on the "Big wins" instead? Should we not be focusing our efforts on achieving the maximum benefits? Over your working career and lifetime, the small wins can save you maybe 100's of thousands of Rands, but big wins could  save you millions.

So with that in mind I decided to categorise our expenses, and then see where the largest percentage was going.






One of the first things that stood out for me after checking the results, was the percentage going towards investing. It is not that great and quite some way off compared to those "front of class" Fat Wallet  listeners Jo/*/*/*/*/*/*/*/*/* and Conrad, and the headmistress herself Kristia. They all brag about waaaay higher investment and savings rates.





So now you can start asking questions like - should I spend 2 hours on the phone with a few insurance companies which may shave R100 off my insurance premium, or should I rather spend, a few days selling my current really expensive car and buy a cheaper one which will reduce my insurance premium, running costs and car repayments?


There is only x amount of time in a day, and you have only y amount of patience (where y << x)


We are all aware of the magic formula for generating wealth and retiring early.

Excel spreadsheet that allows categorisation of expenses. Does pie chart and can also show savings/investment rate.

Moving providers takes time, focus on most benefit.

Housing and cars probably the biggest factors. Maybe I should have bought a cheaper place.



I have seen threads on some forums with people arguing over a couple of rand saving on bank fees, and spending hours checking whether eBucks is worth it etc. This is the type of thing you can dive into once everything else has been minimised...

Housing (R):
Groceries (R):
Utilities (R):
Medical (R):
Clothing (R):
Transport (R):
Insurance (R):
Cellphone (R):
Toiletries (R):
Internet (R):
Childcare (R):
Banking (R):
Maintenance (R):
Donations (R):
Investments (R):
Savings (R):
Other (R):
(R):
(R):

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Till next time, Stay Stealthy!
 - ~ - ~

1 - I enjoy Jack Black movies way more than I should

Tax - Interest Versus Dividend Withholding Tax

How you would be able to type letters
using a numerical keypad is beyond me

If all goes according to plan, my retirement is roughly 13 years, 7 Months and 28 days away (but whose counting?) There is still a fair amount of time to go, and a lot can change - so although not top of my mind, I have recently been giving some thought on how to minimise my Tax burden in retirement.

Naturally you want to pay as little Tax as possible (if there is anyone out there wanting to maximise their Tax in retirement, get in touch!). The first thing I thought I would check out is the Tax efficiency of Interest Income versus Dividend Income.

How To Save Money - The Car Wash

The car wash - for people who have
money to burn. 

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I am not sure if it is a South African thing, but people here sure do love to wash money away their cars. At the garage around the corner from Stealthville, I see long queues every weekend as people spend hours waiting for their hunk of metal to be made all nice and shiny.

Now I have no problem with this, except for the fact that it is absolute madness!