Be the boss of your budget
The beginning of the year is the best time to get a grip on your moeny affairs.
With all the twists, shifts and turns the economy has taken this year, it certainly hasn’t been easy-going for cash-strapped South Africans.
Now that we’ve kissed the winter blues goodbye, it’s time to spring clean your finances!
“Take this opportunity to get organised. The more organised you are, the more in control you are. You want to be in control of your finances – not the other way around,” says John Manyike, head of Financial Education at Old Mutual.
“Changes in the economy and your personal life affect your budget, which is why it should be revisited,” says Budget Insurance’s Susan Steward.
In December, petrol prices are expected to rise by 75 cents a litre and diesel by 63 cents a litre. Electricity tariffs are expected to increase by more than 20%.
And as August stats indicate, South African consumers remain under tremendous pressure to clear debt.
Preliminary statistics from Stats SA reveal that there have been 48 169 civil summonses issued for debt in June, valued at more than R350 million. Make sure to pay off the most expensive debt first. “This is the debt that carries the highest interest rate and is costing you the most. For example, if you have a bond at a 10% interest rate and a personal loan at a 20%, consider paying off the loan first,” says Manyike. This isn’t about scrutinising every cent but rather to identify possible areas for saving. Look at your monthly bank statement and see where most of money is going.
Examine your monthly budget and cut out things you can do without. Make a plan to set up a monthly debit order to an investment account or open a tax-free savings account, increase your pension fund contribution and request the 13th cheque option from your employer.
Ideally an emergency fund should cover three to six months’ living expenses, says Steward. Just by putting aside R250 a week, you have R1 000 at the end of each month. You could be paying subscription fees for magazines you don’t read, or a gym you don’t go to.
and seek advice on the best methods to save. – Old Mutual, Budget Insurance, Moneyweb