Steps to­wards fi­nan­cial free­dom

Sunday Observer - - NEWS -

Get to a quiet, un­in­ter­rupted place and list all ex­penses that you might have. In­clude even air­time, drinks and petrol so that you can re­flect on whether such spend­ing is jus­ti­fied.

Sep­a­rate items into three cat­e­gories, i.e. es­sen­tial, fi­nan­cial and flex­i­ble spend­ing.

Don’t be shocked by your spend­ing pat­terns as the first step is to help you re­alise where you stand fi­nan­cially.

Write out your net pay af­ter stop or­ders and if you get mar­i­tal/girl­friend al­lowance of main­te­nance, add the amount.

Split in­come ac­cord­ing to 5020-30 rule. If, for ex­am­ple, you get E6 000 af­ter all de­duc­tions, sep­a­rate the money as such; E3 000, E1 200 and E1 800.

Look at how much you have been spend­ing on the dif­fer­ent items on your ex­penses and re­flect on how th­ese fall into the dif­fer­ent amounts. For ex­am­ple, look at how much you are sup­posed to be us­ing on essen­tials as op­posed to flex­i­ble spend­ing.

Work on a plan which al­low for money to be saved while cut­ting back on friv­o­lous spend­ing.

Look at gro­ceries, look at whether they are all nec­es­sary and if you can af­ford to al­ways have such ex­penses; change meal plans if nec­es­sary.

Look at your cloth­ing ac­counts how you can set­tle them all and in­stead try pay­ing cash.

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