Prepare for the worst

POINTERS: GET YOUR FINANCES IN ORDER

Some (mostly) common-sense tips.

There’s every reason to suspect that things are going to get worse before they get better. Therefore, it’s surely prudent to at least make sure you’re prepared.

Don’t just budget, balance it!

If you don’t plan or track what you spend your money on, how could you hope to get a grip on it? Drawing up a detailed – and reasonable – budget of exactly how much you anticipate to spend and on what is a first step. But, once you’ve done this, you’ll probably find that things don’t quite add up. Now, you’ll need to balance your budget and make sure you’re not living on your credit card from month to month. Savings clearly need to be factored in. Finally, start tracking your every purchase/transfer/payment monthly. This is the only way to know whether your budget is anywhere near realistic, where you can cut back and where you’ve made mistakes.

Cut the crud

Beware the debit order! As part of your budget, interrogate each debit order that goes off your account monthly. Along with this, figure out what recurring expenses you have monthly. Then, start cutting back. Of course, some expenses are non-negotiables. But, you could ask your insurance provider to relook at your premium. Focus on those expenses which can be reduced or stopped altogether.

Shop smart

Repeat after me: shop the specials and sales. When it comes to supermarkets, this is dead simple. All the majors (even Woolies) have weekly or fortnightly specials. Buy what’s on sale, when it’s on sale. Bulk-buy the regulars like coffee or wine or pasta or toothpaste when they’re discounted. There is no reason to pay R120 for something that’s predictably on sale once a month for R80, for example.

Sell unnecessary stuff

This is not going to sustain your household income statement over time, but will certainly help achieve the goals of paying off short-term debt and/or building a savings buffer. Take a long, hard look around your house. I’d be willing to bet you’ll find tons of ‘stuff’ that you never use. Last year’s iPhone in the drawer? The extra TV in the guest bedroom which no one has used since you moved in? Your old washing machine in the garage? Sell it. And use this money cleverly. Don’t spend it on more stuff!

Start tracking every purchase monthly

Do extra work

An extra income will do wonders for your household income statement and balance sheet. Old Mutual’s Saving and Investment Monitor this year highlighted this trend of ‘slashers’ – people with multiple jobs. Part-time income from work in the evenings or over weekends could easily mean a good few thousand rand a month.