ADOPT A SMART APPROACH TO MANAGING YOUR MONEY

“DRAWING up a budget is always a smart first step. This will help you to feel more in control – knowing where your money is going each month and ensuring you live within your means,” says Graham Craggs, the spokesperson for Budget Insurance.

Budget Insurance has compiled the following guide to smart money management:

• To draw up a budget, start with a list of fixed expenditures and other monthly deductions. Have a careful look at what you are spending your money on and identify where you might be “leaking” cash on non-essentials, such as take-aways, entertainment and satellite TV, as well as on essentials such as your cellphone, groceries and transport. Once you have pinpointed areas where you could be spending less, start cutting back.

• Even the smallest adjustments can make a meaningful difference over the long term. Channel the extra money you have into paying off your debt faster, starting with those with the highest interest rates. As your debt repayments get smaller, you will have more money to allocate to more worthwhile causes, such as saving for retirement, a deposit on a new house or a holiday.

• Set a savings goal and consider saving as a non-negotiable, essential “expense” on your monthly budget. Whether your goal is to put away R250 or R1 000 a month, put it in your budget and stick to it.

• Be honest about your debt obligations and your expenses so that you have a clear picture of your true monthly spending.

• Get creative when looking for ways to cut back on costs. For instance, you could establish lift-clubs to save money on petrol and encourage your family to switch off lights in unoccupied rooms to save on electricity costs.

• Put away your credit cards. Rather carry a debit card for everyday purchases and save up for the more expensive things you want.

• Use your smartphone smartly. There are many free apps that make budgeting easy, including 22seven, MyFinancialLife, Sage Pastel My Money, and Spending Tracker.