When it comes to finances, a lot of us are late bloomers. Often we first need to get in some financial trouble to learn our lesson. Some of us, however, need to learn the lesson more than once. In tough economic times, we have to work even harder to stick to our budgets, stretching our willpower beyond its limits. To really have control of our finances, we need an always-on approach, which is often a tall order considering all the other responsibilities and tasks that take up our time each day.
These five money essentials can help you keep the basics of your personal finances in check.
Tip 1: Every little helps
Bring back the coin jar and start appreciating that lone 50 cent here and the odd 20 cent there, because together your 30 cents away from a rand. It sounds silly, but every little helps. One of the biggest problems we as consumers have is that we often forget the true value of money, especially small change. We become programmed in thinking that it is okay to pay R40 for a sandwich or R25 for our daily coffee fix, and that the change in our wallets are worthless. By making multiple small changes in your spending habits you can save a lot of money.
Tip 2: Keep the bigger picture in mind
Nobody likes making tough decisions. It’s hard to decline invitations to fun events due to finances, so we often try and manage those expenses to our own detriment. Make it easier on yourself by always keeping the bigger picture in mind. If you are cutting back on spending to afford a holiday or to save for a baby for example, focus on the reward rather than what you are losing out on.
Tip 3: Beware: Debt can hold you back in life
It can be extremely tempting to pay for things we need or want using credit. If you are able to pay off your debt quickly, it makes sense. However, if you struggle to repay your debt you might be forced to depend more and more on credit to make ends meet every month. Debt instalments and the interest accrued can rob you from financial freedom and prevent you from reaching your financial goals.
Tip 4: Saving should always be a priority.
Saving is often seen as a nice to have. It’s the last thing we do on good months when we have something left over and the first thing we cut or dig into on bad months. Saving should always be a priority. In fact it should become a permanent, automatic deduction into a separate account the moment your salary is paid. How much should you save a month? A good amount is 20% of your after-tax salary. However, if you aren’t used to saving it could be difficult to save that much from the get-go. Try saving 5% and work your way up. Try and cut back as much as you can where you can every month.
Tip 5: Everyone is different. Find your financial style.
At the end of the day the same approach to getting your finances on track won’t work for everyone. Having a budget and tracking your spend is obviously non negotiable, but the implementation thereof will be different. Know your weaknesses and pressure points, and create a plan that works for you.
Already to deep in trouble? Don’t worry, at Debt Rescue we specialise in helping over-indebted individuals get back on their feet. Give us a call, fill out our online form, or chat with us live by clicking here. One of our expert debt counsellors is ready to assist you.