Not only did living costs rise in 2017 but a lot of people battled with increasing debt, struggling to make it to the end of each month. If you’re among the many South Africans who found last year challenging when it came to finances, 2018 represents an opportunity for you to step into financial freedom.
John Manyike, the head of financial education at Old Mutual says “with the current economic conditions, it is essential that South Africans become more realistic about their finances and manage their debts more effectively”, as published by IOL. Here’s some advice on how you can let go of your bad spending habits and be on your way to financial liberty this year.
Manage your money in a smarter way
Graham Craggs who is the spokesman of Budget Insurance, says: “Drawing up a budget is always a smart first step. This will help you to feel more in control – knowing where your money is going each month and ensuring you live within your means”.
When drawing up a budget, you should begin by listing all fixed expenditures and other monthly deductions. Track all your expenditures to see where your money is going and pinpoint where you may be spending cash on non-essentials, such as leisure activities, restaurants, and satellite TV, as well as on essentials such as groceries and transport, and your cell phone. Once you have identified things you could be spending less on, start lowering your spend.
Even tiny adjustments can make a significant difference over the long term. Use the extra money you have towards settling your debts such as a Personal Loan faster. You will have more money to channel to more valuable causes, such as putting away money for retirement or a deposit on a new home.
John Manyike says it’s important that you don’t repeat the same mistakes. He advises that you should take stock of your 2017 Credit Report from one of the major credit bureaus. “You are entitled to one complimentary credit report a year, so it’s wise to make use of this service. Your credit report will provide you with a detailed credit profile, which will enable you to gauge your risk profile. Credit providers rely heavily on this information before approving any further credit to you,” he says.
You need to be sincere about your debt agreements and your expenses so that you have an accurate account of your monthly spending. Another smart way to manage your money is to carry a debit card instead of credit cards for everyday purchases and to save for the more pricey things you want. Manyike says you should try your best to make 2018 completely debt-free.
You also have access to several free apps that make budgeting easy, such as the following:
With the number of free resources available to help you manage your finances, the power to make 2018 your year of financial freedom is in your hands.
Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial advice.