As the government relays its priorities for the financial year ahead in its national Budget speech, it is no different from our household budgets.
Solutions manager Farzana Botha encourages South Africans to rethink their financial priorities.
According to her, people have been feeling pressure on their wallets over the past few years as their income hasn’t kept up with the increasing prices.
In a recent survey conducted by Sanlam, South Africans stated that paying off debt and making ends meet are their top two financial concerns.
As a result of these short-term priorities, many South Africans struggle to save money for the future.
“Not only do we need to save more to provide for our own future and our families. With high debt levels and low savings levels, as a nation, we are consuming today what we have not yet earned tomorrow,” cautioned Botha.
Become a minister of your finances with these five tips from Botha:
Go through your bank statements
Go through your bank statements in detail. Most online banking applications allow you to look separately at the money that comes in and the money that is paid out. Pay close attention to the money that is paid out, especially all the small and often unnecessary purchases – these can add up quickly!
Investigate your spending habits
Make improvements to your spending habits using the knowledge you gain from calculating this amount. To achieve short-, medium-, or even long-term financial goals, money that would otherwise be spent on needless products can be reallocated.
Customise your own household budget
Budgeting often has negative connotations of limiting or depriving ourselves. Instead, shift your focus from a budget to a spending strategy that incorporates small rewards. By doing this you’ll be more inclined to stick to it if you do.
Set joint financial goals
If you are in a family or relationship, work together to agree on a family spending plan, discuss ways to share expenses, and set joint goals. Alternatively, make sure they understand your journey towards financial confidence and how they can support you.
Set realistic goals
Set achievable goals and treat yourself to your favourite takeaway or cup of coffee when you reach them. These benchmarks could be behavioural objectives like limiting your credit card use to three swipes per week or utilising a cash-only system to keep tabs on your expenditures. The envelope system took TikTok by storm last year with #cashstuffing racking up over 820 million views!
The reasoning behind this approach is to limit the amount of money that enters and leaves their bank accounts.
“Consider working with a certified financial planner if creating a spending plan makes you feel overwhelmed. They can provide advice, direction, and workable ideas to help you improve your present financial status after carefully considering your particular circumstances,” advised Botha.