4 Simple Ways to Take Control of your Finances

The pandemic has left a lot of South Africans without a job or severe salary cuts. This has caused tremendous pressure on consumers’ financial situation. A recent study by Deloitte has found that South Africans are more concerned about their personal finances than getting coronavirus. According to the study, financial stress was a main driver for anxiety among South Africans. 

Job losses and salary cuts resulted in consumers spending their savings, racking up more debt or even both. 

Old Mutual found that 58% of consumers are facing high financial stress due to Covid-19. 

If you’ve spent most of your savings or accumulated more debt than you can handle, it may seem like you’ve lost control of your finances. You did what you had to do to keep on surviving, and that’s okay. 

The good news is that you can do something about it. 

You may not be in a position to resolve all your financial stress right away, but you can build towards a better financial future. 

Here are 4 ways to take control of your finances. 

1. Analyze your current financial situation

Analyze your current financial situation.This will give you a better idea of how you can improve your finances. When you’re on a path to financial recovery you have to spend your money wisely. 

Spend some to go through all your debt accounts and monthly expenses.

Eliminating all your debt should be your priority right now. Make a list of all your debt accounts and their amounts. This includes your car loan, personal loan, credit card debt, store card debt etc. List each account’s monthly minimum repayment amount.

Taking note of your monthly expenses is crucial right now. Knowing how much money you need for monthly expenses will help you cut costs where you can allocate more money towards your debt. 

List all your monthly expenses like groceries, rent/mortgage, school fees, travel expenses, household expenses etc. Make this list as detailed as possible to give you an accurate overview of where your money is going each month. 

2. Create a monthly budget 

Now that you know what you’re spending your money on, you need to control the way you spend it. That’s where a monthly budget comes in handy. 

There are a lot of different ways that you can budget your monthly income. However, because your current goal is to eliminate debt, your budget should reflect that. 

List all your debt accounts and their minimum monthly repayments. Calculate your total monthly debt repayment and subtract that from your monthly income. Whatever money is leftover is what you have available for monthly living expenses. 

Creating and sticking to a budget is one of the fastest ways to take control of your finances. 

Read our blog post How to Budget Monthly for more budgeting tips. 

3. Pay off your debt 

Debt may be one of the biggest reasons why you feel like you’ve lost control of your finances. Studies have shown that too much debt can cause high stress and anxiety. Leaving you feeling hopeless about your financial situation. 

You don’t need to feel stressed out or anxious about your debt. You just need the right strategy. 

Use the Snowball Method when you’re paying off multiple debt accounts. This simple strategy that will help you pay off your debt as quickly as possible. 

How does it work? 

1. List all your debt accounts and the monthly minimum repayment amount.
2. Order your accounts from the lowest monthly repayment amount to the highest. 
3. Pay the minimum monthly repayment amount on all your debt accounts.
4. Add any extra money that you have towards the account with the lowest monthly amount. 
5. Once that account is paid off use that same repayment amount and pay off the next account on the list. 
6. Once that account is paid off use that same repayment amount and pay off the next account on the list. 
7. Repeat this process until you’re debt-free. 

The Debt Snowball Method lets you build up enough momentum to pay off the big debt amounts. 

Here’s more information about the Debt Snowball Method. 

4. Find professional help 

If you’re still struggling financially, you may be over-indebted and need professional help. Seeking out professional help can be a great way to fast track your way to becoming debt-free. 

Debt counselling, or debt review, is a great way to help you take control of your financial situation.

When you’re under debt review:

• You will receive a monthly budget designed to help you.
• You will only have to pay one single reduced monthly debt repayment by negotiating with creditors.
• All your assets will be protected from creditors.
• Have more money available for monthly living expenses. 

For more information about debt review – What is Debt Review?

Being over-indebted can lead to serious financial problems. We recommend that you consult a debt counsellor before it’s too late. Alternatively leave your contact information below and one of our consultants will contact you shortly.