Do you know exactly what is going on in your finances? Have you set financial goals, and are you saving effectively towards each? Or are you flat broke at the end of each month with no plan in place?
If you are the latter, there is no better time than the present to do introspection and actively pursue becoming better at personal finance management.
Here is the second part of our international financial experts’ tips, so you can start managing your finances like a pro.
Tip 8: Invest in yourself
Paul Clitheroe, the Australian financial analyst and financial advisor says that it is important to: “Invest in yourself. Your career is the engine of your wealth.”
Sometimes the only thing standing between you and that promotion or a higher earning job is the right qualification. If this is true in your career, investing in yourself is a very good idea and it should form part of your monthly budget.
Tip 9: Recognise your money problems
Jack Canfield is one of the names behind the popular Chicken Soup for the Soul series, which has sold over 500-million copies and has been translated into over 40 languages. As a man who knows about motivating people, his advice is simple: “You can’t heal what you don’t acknowledge.”
Before any person can make a change and commit to that change, he or she has to first admit that there is a good reason for it. How does your finances look like?
Tip 10: Free yourself from bad debt
You may have heard of the book Rich Dad Poor Dad? The name behind this hit and the founder of the Rich Dad Company is Robert Kiyosaki. According to him freeing yourself from bad debt is a way to start the journey towards wealth and freedom.
There are many books and self-help advice to get you started on this road. If you are too over-indebted to free yourself from debt on your own, debt review could be a solution.
Tip 11: Spend less than you earn and save the difference
Money coach Todd Tresidder, and the man behind FinancialMentor.com had a zero net worth when he was 23-years old. However, 12 years later he had a net worth of $1-million. But how? He says: “Wealth building is simple and can be fully explained in just one sentence: Spend less than you earn and invest the difference wisely. If you get that right you will be wealthy. Everything else is just details.”
Investing is obviously a whole different ball game and should not be entered into until you have complete and utter control of your finances, debt and retirement savings. But you can and should SAVE that difference in an interest accruing account in the meanwhile. The key take-away in his advice is to spend less than you earn, which is something South Africans struggle with.
Tip 12: Draw your budget in cash & prevent overspending
The well-liked consumer expert Clark Howard has his own radio talk show where he shares advice on how to save more and avoid getting ripped off. He says: “Pay in cash for whatever you can, using envelopes to divvy up your money and keep you within budget.”
This is excellent practical advice. These days it is so easy to swipe for anything and everything, which makes it difficult to stick to your budget. If you are overspending every month try his system. Draw your weekly budget in cash and place it in an envelope. It is also a good way to practice appreciating the value of every Rand you spend seeing as you have to physically part with your money.
Tip 13: Update your budget frequently
As a senior financial advisor for a large financial institution, Kathryn Garrison knows about managing money. She advises: “Set aside an hour twice a month to update your budget and make sure your accounts are balancing.”
Simply making a budget at the beginning of the year and trying to follow it every month will not cut it. You’ll soon realise that your accounts aren’t balancing because you may have forgotten about this and that or some of your subscriptions or policies may have increased in price. By making a fresh budget every month and tracking it frequently, it will be more difficult for you to lose track of your spending.
Tip 14: Restrict access to your savings
As a financial journalist, author and motivational speaker, Jean Chatzky has made a name for herself in the financial industry. Her advice is to restrict access to your savings, “If you can’t see it and you can’t touch it, you won’t spend it”, she says.
It is clear that saving is the most important theme when it comes to learning how to manage your finances better. If you are not saving you are running the risk of falling into debt when unexpected expenses arise or when you don’t have an income to rely on later in life. So when you do get into the habit of saving, it is important to not have easy access to these savings. Keep your savings separate from your normal account and “forget” about it, so as not to tempt yourself.
At Debt Rescue we are passionate about getting over-indebted consumers back on their feet through professional debt counselling. If your debt has spiraled out of control, ask our help. You are not alone.