Since the first week in January we have been sharing weekly tips that will help you implement powerful money resolutions in 2016. Let’s recap and elaborate on these eight tips.
Tip 1: Create and stick to a strict budget
Everything starts with a budget. A budget is to your dream life what blueprints are for your dream house. Your budget should reflect your current financial status (income, expenses and savings) to the cent and it has to be followed like a treasure map. Through an updated budget you can track and control where your money is going to and cut back more effectively.
Tip 2: Spend less on luxuries
Once you have a proper budget, indicate which of your spending is luxuries and see if you can cut back on them in 2016. The adjusted repo rate and the poor rand exchange rate should serve as a wake up call to all South Africans living above their means. Cutting back is the only way forward!
Tip 3: Set up a savings account
Saving is definitely an important theme for 2016, so the sooner you set up that separate savings account, the sooner you can start contributing towards it. Automatic saving deductions after payday is the best option. Double its effectiveness by limiting access to your savings account through a 7-32 day notice period.
Tip 4: Learn from the experts
Spend more time this year educating yourself on personal finance by taking up the advice given by financial experts. Listen to radio interviews, buy books, read articles etc. The more you learn about how you should be thinking about money, the faster you can teach your brain to think differently when it comes to spending and saving.
Tip 5: Tackle your debt
Make a plan to tackle your debt this year. Make a list of all your debts except your home and car loans. And either use the Debt Avalanche method, where you tackle the highest interest bearing accounts first and work your way back down the list, or use the Snowball method and the account with the smallest total first and work your way up. If you are too over-indebted, tackle your debt with the help of Debt Rescue.
Tip 6: Save MORE!
Learn to save even more this year. Up all your savings by thinking out of the box and cutting back in creative ways. In our article entitled How to Save More in 2016 we share 4 practical ways in which you can save more this year. However, there are multiple more ways to save on anything from groceries to cutting your electricity bill etc. Think big!
Tip 7: Reward good saving habits
Cutting back and saving more is difficult. It requires you to constantly think of what you need and not what you want. So, to encourage your good saving habits, reward yourself every now and again with the things you want in life by working it into your goals.
Tip 8: Think & talk money, more frequently
Couples don’t talk enough about money. In our blog post called Money and Marriage: Advice you might not want to hear, we look 4 money related habits you and your spouse should be doing together and why it is so essential. When you think and talk more about money, the subject becomes less taboo and a potential fight risk, and more of a constructive habit in the marriage.