Whatever the state of your finances, you have a gap to improve them now – or at least put a plan in place to boost them when circumstances return to normal. You might even find ways to free up some cash flow or make a little extra money too!
Before you get down to the nitty gritty, however, take some time to address the emotional aspect of money. This is a time of great uncertainty for many South Africans, with fears of job losses, salary cuts and more looming like a shadow over the country. Talk to your partner or family so that you can better understand each other’s worries, points of view, and make a plan to deal with what may come.
In the meantime, here are some healthy habits to practice so that you’re taking the right steps towards financial security:
1. Find out where you’ve been spending your money
Examine your bank statements for the past 12 months to see where you have been spending your money. Take notes and do the maths. You might be shocked to see how much money you have spent on non-essentials over the last year!
2. Review your budget
Use this opportunity to review your budget and make decisions about where you want to spend your hard-earned money over the next year. We’ve said it before and we’ll say it again: If you don’t have a budget yet, make one!
3. Make a budget
What is your take-home pay? Add up all your income and write it down. Next, add up all your monthly expenses, including bond or rent and car payments, medical and insurance premiums, school fees, food and any other amount that goes off your account. Now, deduct your expenses from your income. If the remaining amount leaves you feeling uncomfortable…
4. Shave and save!
Writing your expenses down will help you identify where you can shave your spending. Start with unused gym memberships and subscriptions, but don’t be tempted into making common mistakes, such as cutting back on insurance and medical aid. Whatever amount you manage to free up through this exercise, and in fact, any spare cash that you have… save it.
5. Reduce your debt
Debt is a threat to your financial security – especially in these uncertain times – and the sooner you pay it off, the better. While you are taking stock of your financial situation, prioritise paying off your debt. You could use the snowball method and pay off the debt with the smallest outstanding balance first.
If you’re worried that your cash flow is too tight to make the next debt payment, the best time to ask for advice is now. The earlier you ask for help the easier it is to find a solution.
Get in touch with the debt experts today and let’s work together towards financial certainty.