Strive to be financially fit
Saving needs to be a priority
FINANCIAL fitness is the basis of being able to reach our aspirations and goals in totality — all of which starts with proper planning.
Leon Daniels, head of funding at Nedbank, said that in these turbulent times, the realisation that there may be a need for systemic change in one’s financial management needs to be dealt with immediately.
Saving needs to be a priority in financial planning, said Daniels. Ideally, one should save a minimum of 10% of one’s monthly net income.
But no amount is ever too little on your journey to financial fitness.
Add savings to the monthly budget list as you do the water, lights, telephone, bond and rent, which means you pay a portion into your savings account as part of your monthly expenses.
Start with a monthly budget and stick to it. Knowing how much is left at the end of the month lets you know how much you are able to save.
Write down your financial position — your expenditure against monthly income. Be honest and plan debtmanagement activities.
One way to manage debt is to consolidate it into a single lowinterest obligation. Do not be tempted to use that credit card, store card or overdraft indiscriminately once debt is consolidated.
If you can’t consolidate debt, make a list of debt obligations in incremental order.
Concentrate on paying off the most expensive debt first — i.e. the debt with the highest interest rate. Generally, these include credit cards and overdrafts.
Concentrate on one debt at a time.
If your expenses exceed your income every month, think about scaling down.
Options include renting a home in a cheaper area, buying a cheaper home or cutting back on unnecessary luxuries. Always compare prices.
It is important to continually keep an eye on your finances.
The simplest action of all is to make the pennies count in the long term through saving.
— Business Editor.