Know where your money is going
JANUARY is known as the longest “three months” of the year. While social media memes are keeping people laughing on how to deal with the dreaded month that is financially unstable after the festive season’s spending, Aimee Miller, the marketing and sales manager at consumer online retailer Teljoy, has some tips on how to budget better for the year ahead.
LEARN HOW TO BUDGET TO SEE WHERE YOUR MONEY REALLY GOES
While it may be tough to start, seeing how you spend your money each month is a big initial step in understanding how best to manage your finances.
“The very first thing to do towards setting up a viable budget you can stick to is to learn to account for every cent you spend in a normal month,” says Miller.
In other words, where you think you spend your money and where you actually spend it can be two different things, says Miller.
“There are so many expenses that happen every month of which we are not consciously aware. Interest rates and bank charges are among these, and can account for thousands of rand you would not take into consideration. Suddenly, you’re broke with no idea where your money went.”
SPEND THE MONEY YOU HAVE AS WISELY AS POSSIBLE
“Ideally, you should be spending 50% of your income on essential living expenses, 30% on flexible spending – such as internet, gym memberships and other negotiable expenses – and the final 20% should be put towards formal savings and investments.”
IF YOU NEED TO CUT BACK, CONSIDER ALL THE ALTERNATIVES
A budget will also reveal where you are overspending and where you could cut back. Consider using public transport to get to work and save on petrol and parking costs. If you find you’re spending a lot on things such as takeaways, rather spend more time cooking meals at home, preferably using gas above electricity, to save additional costs.
But it all starts with the budget, says Miller: “A budget is your blueprint towards financial freedom and living within your means. It’s never easy to recover from festive season spending, but the good financial habits you put into place today may save you from suffering the same consequences come the end of 2020.”