True Love

Finance – 24 hours of your pay cheque

Understand­ing your spending habits will help you see clearly what you need to change in managing your money. Once you adopt sound financial habits, you’ll make your salary stretch even further.

- By KABELO COLLIS

Payday! For some it’s mid-month and for others it’s the last day of the month. Whichever date it falls on, the relief that comes with the SMS notificati­on alerting us that our salaries have comfortabl­y landed in our bank accounts is one we all share. But, for many of us, it comes with mixed emotions. It’s a sigh of relief or a sense of accomplish­ment for the work put in the previous month. In some cases, it brings the dreaded stress of debit orders which, based on our varying financial obligation­s and spending habits, may leave us either financiall­y fit or see us fall financiall­y flat before the new month even commences.

We took a journey into the lives of four women who allowed us to track the first 24 hours of their pay-cheque, from the authorised debit orders, budgeted for monthly household and lifestyle spend, to the adhoc cash withdrawal­s and swipes. The purpose? To assist in understand­ing various spending habits and pull out the good from the bad. Also, to provide counsel on how to turn them around and allow us to meet some of our long-standing financial and lifestyle goals.

THE NECESSITY SPENDER

Meet Virginia Mashaba, a 40-year old marketing profession­al at one of the four major banks. For her, seeing a positive bank baance in her account is what keeps her sane. As a result, she has become a self-confessed necessity spender, with most of her budget being channelled towards household and lifestyle essentials. “Call me stingy, but I want to always see money in my account, so I try to spend mostly on necessitie­s, with food being at the top of my priority list,” she explains. Virginia admits, though, that she has preferred top-end retail outlets for various necessitie­s which, in most cases, she is not willing to compromise on. However, she does admit that these, at times, come with a higher price tag. She takes us through her transactio­nal journey in the first 24 hours of her being paid.

THE DEBT CLEANER

Thirty-year old accountant, Nozuko Dandala, cleaned up her finances in 2017 as she believed her money could be redirected to better use. “I felt like money was constantly leaving my account and that annoyed me. As a result, I printed out my bank statement and tracked where this money was going and decided to change my habits.” Today, Nozuko has minimised the number of debit orders, with 50% of her salary channelled towards essential expenses – leaving her with an extra R1000 each month that she deposits into a savings account. The first 24 hours of her pay-cheque see only one debit order transactio­n, with the rest being debited four-days after payday. “Sometimes pay day falls on a weekend or public holiday and I’m a bit scared that any debit orders that fall on this day may not find enough funds and send my account into a negative balance. I feel safer with the 25th of every month because my account will always have funds in it.”

THE MAJOR COST ELIMINATOR

Communicat­ions specialist Kgothatso Kgope’s first 24 hours of her pay-cheque are dedicated to major expenses – her bond, vehicle repayment, insurance and levies. With these major costs out of the way, it helps guide her budget for the rest of the month. “I’m then able to map out the rest of my monthly spend and

concentrat­e on enjoying the little I have left” Rewarding herself on payday is a no compromise, but she admits it quickly beomes impulsive ‘nice to have’ spends that impact majorly on her monthly budget.

THE COVER YOURSELF ADDICT

At 48, Sophie Xaba’s obsession is making sure her family is ‘covered’ should anything happen to her. For this executive personal assistance and mother-of-two, keeping her life cover, children’s educationa­l investment and funeral policies up to date is nonnegotia­ble. These debit orders are all scheduled to go out minutes after her salary reflects in her bank account. “My priority is my family’s future. So transactio­ns aimed at providing them with insurance and security for the future become a priority.” She adds that most of her salary is dedicated towards enriching the lives of her children and providing them with as many opportunit­ies as she can. Financial Adviser and Head of Retentions at Liberty, Boitumelo Mothoagae, further explains that we should break down our salary and channel different portions of it towards debt and savings – with no more than 50% of it spent on all our debt and up to 30% going into savings. The remainder, she adds, may then be used towards what we deem necessary. “It’s important for us to know and be able to track what we spend on, therefore eliminatin­g any risks of spending money unnecessar­ily,” she says.

EXPERT TIPS ON GOOD FINANCIAL HABITS:

Budget: Draw up a budget and stick to it as this will help you track your expenses. A budget is like a compass for your finances, it provides a sense of direction so that when you deviate, it’s easy to get yourself back on course again.

Pay extra: Structure your budget so it allows for extra payments on your debt. While making minimum payments is good, making extra payments is even better because it will help you pay off debts early and save on interest. This also helps improve your credit profile.

Avoid impulse purchases: Running out of money before the next pay day is rooted to a lack of planning. Always plan your finances and never let your guard down by giving into unplanned purchases.

Cover yourself: Most of the women have some sort of insurance cover coming off their payslip every month. Insurance is designed to protect you against unforeseen circumstan­ces. Your insurance needs are dependent on the life stage you’re in. Your greatest asset is your ability to earn an income. As you get older you may start a family, become more establishe­d in your career, you’ll need comprehens­ive risk cover. Review this with anfinancia­l advisor, to ensure you’re not over or under insured.

Save and Invest: A financial advisor will help you to choose the right account that’s suitable.

 ??  ??
 ??  ?? EXPERT: Eunice Sibiya, Head of Consumer Education at FNB says the behaviour of consumers in the first 24 hours after pay day is critical and is determined by their financial obligation­s. In Virginia’s case, while it’s admirable that she takes care of...
EXPERT: Eunice Sibiya, Head of Consumer Education at FNB says the behaviour of consumers in the first 24 hours after pay day is critical and is determined by their financial obligation­s. In Virginia’s case, while it’s admirable that she takes care of...
 ??  ?? EXPERT: Nozuko did the right thing by cleaning up her account, and in the process, enhancing her credit profile. Learn from her by honouring your debt commitment­s. Pay your debt as soon as you receive your salary, and try as much as you can to avoid...
EXPERT: Nozuko did the right thing by cleaning up her account, and in the process, enhancing her credit profile. Learn from her by honouring your debt commitment­s. Pay your debt as soon as you receive your salary, and try as much as you can to avoid...
 ??  ??
 ??  ?? EXPERT: You can never save enough for the future. Experts urge Sophie to have an emergency fund for rainy days. She should schedule these to be transferre­d from her salary to an investment account.
EXPERT: You can never save enough for the future. Experts urge Sophie to have an emergency fund for rainy days. She should schedule these to be transferre­d from her salary to an investment account.
 ??  ?? EXPERT: In Kgothatso’s case, it’s okay to splurge on yourself every now and again, provided all the necessary payments have been made. To make our money work harder for us as well as to ensure wealth growth, we need to pay ourselves first by putting...
EXPERT: In Kgothatso’s case, it’s okay to splurge on yourself every now and again, provided all the necessary payments have been made. To make our money work harder for us as well as to ensure wealth growth, we need to pay ourselves first by putting...
 ??  ??

Newspapers in English

Newspapers from South Africa