New home, new budget

Moving to a new home almost invariably causes some financial anxiety, but it also presents the perfect opportunity to overhaul your household budget.

"The careful assessment of your financial health that has gone into the decision to buy a new home has already laid the foundation for a well-planned cost cutting strategy, says Gerhard Kotzé, MD of the RealNet estate agency group. "All you need now is the determination to keep searching for ways to save."

For example, making arrangements to pay your new water, lights, telephone and other service accounts is a good time to ensure that you are getting the best deal that the service providers offer. "There are limited options with most municipal services," he says, "but you should in any case check whether there are savings to be made by paying rates annually instead of monthly, or if you will qualify for a discount by paying electricity and other service charges before the due date.

"You should also weigh up the costs of installing prepaid meters and possibly a solar power and water heating system against the potential savings on utilities - and the convenience of being able to avoid load-shedding."

Kotzé says this is also a good time to review your cellphone usage and any contracts to ensure that you are getting the most data and airtime possible for your money - and making the most of any wi-fi (internet) connection you already have at home or the office.

"Home buyers should also shop around for the best rates on their new homeowner's insurance and, if they are moving to a more secure neighbourhood or a home with better physical security measures, they may also be able to negotiate lower premiums on their household contents and car insurance."

In addition, he says, they should find out if any of the security companies covering their new area offers a special rate because it has a large number of clients there - or perhaps a free alarm system to new subscribers.

"And finally, a move to a new area may well mean moving your banking business to a new branch, and create the opportunity to ensure that your bank is giving you the best-priced service package for your needs. "Most banks have loyalty incentives that reward you with lower rates or service charges if you have more than one account with them, or special rates for clients who are over 55. You should establish whether any of these apply to you, ask how you can reduce your bank charges and check out the benefits of telephone or online banking."

Kotzé says an expenditure review may seem like a lot of work, "but it should not take more than a couple of months and the savings should more than compensate for the effort - and make the move to a new home even more satisfying.

"In addition, it may enable you to pay some extra cash into your home loan account every month and shorten your repayment period in the process. This could cut many thousands of rands worth of interest off the total cost of your home. For example, if you currently have a home loan of R1m repayable over 20 years at an interest rate of 7,5%, even an additional R200 a month paid off the capital would reduce the loan term by 13 months, and slice more than R58 000 off the eventual cost of the property."