By Reagan Mitchell, CFP® and MD of WealthyMe
Being a certified financial planner who mostly deals with consumers, I almost invariably must bargain with clients to commit to a financial decision that moves them closer to their financial life goals. One just has to do a google search
to gain insight into the financial health of South African consumers. As a nation, we are grossly under-insured with a combined gap for life and disability insurance of R34.7 trillion rand. This underinsurance further exacerbates some of the social-economic problems we have in South Africa when household breadwinners die too soon or become incapacitated because of an illness or injury. That’s not all, the retirement statistics are just as alarming. In South Africa, more than 50% of employed people do not have a retirement plan and low-income earners cannot afford one. National treasury estimates that only 6% of South African’s will be able to enjoy a decent retirement. In addition, our debt to disposable income ratio sits above 77%. That means that 77% of our after-tax income is spent on repaying debt. In layman’s terms, out of every R1000 we earn, we spend R770 on servicing debt.
What is even more concerning is that our savings ratio is a meager 0.5% of our disposable income and this includes retirement savings. That means we only saving R5 out of every R1000 we earn. The consequences of our low savings
culture for our national development goals should not be underestimated.
With the above as a backdrop, we need to find ways to optimize our spending behavior so that we can make provisions to fund our financial life plans. There are many practical ways for us to optimize our spending and in this article, I would like to share my personal experience as to how I saved more than 45%% on my mobile call charges. In South Africa, I am one of 13.5 million people who have a post-paid contract. On average, my monthly call charges range between R600 and R700, which doesn’t include my device subscription. I’ve been analyzing my monthly spend on my phone bill and compared it to my previous uncapped contract.
It was evident that I was spending more compared to when I had my uncapped contract. I then decided to visit the mobile store where I have my contract in an attempt to upgrade my contract back to uncapped. Unfortunately, I couldn’t upgrade the contract because of my contract technicalities. I bemoaned the fact that I was spending more on this contract compared to my previous contract. The friendly lady at the mobile phone shop offered to help me and she guided me to buy all network voice bundles. She advised me that my contract has an out of bundle rate and that I am paying a lot more per second on my contract. She helped me purchase 500 minutes of voice bundles and informed me that I would get a notification before and after the bundle is depleted, after which I just needed to buy more bundles. The results were amazing.
I compared my April and May invoice. These are the results:
|April 2021||May 2021|
|Per-minute charge||0.7602 cents||0.4048 cents|
|Total call charges||R672.76||R356.20|
For more information about WealthyMe or if you need help with a personalised financial life plan, please visit our
website at https://wealthymefs.co.za/contact