The beginning of the year is always a good time to make a fresh start when it comes to finances
With the price of basic essentials like fuel, food and electricity continuously rising, it seems almost impossible to have any money left over for savings. Michelle Alberts, financial planning consultant at Alexander Forbes, offers five tips that will help when it comes to saving money:
- Lunchboxes are not just for school kids
Besides ensuring you stay away from unhealthy fast food options, taking a packed lunch to work is a sure way to keep your money in your wallet. Analyse what you eat for lunch over the duration of one work week, as each meal has a different cost. Tally what you’re spending – you might be surprised at your findings.
- Shop smart
Where possible, compare price per weight ratio. While bulk buying your groceries is usually cheaper, you may find items on special, which means the smaller size works out cheaper.
- Set up a budget
Start by checking old bank statements to determine the cost of your monthly basic living expenses. Track what you’re spending your money on under essentials and flexible costs such as entertainment. Check your budget throughout the month to ensure you stick to it.
- Understand the Importance of financial planning
By thinking about the bigger picture and where you want to be in five, 10 or 30 years’ time, you can develop a financial plan that allows you to work towards those goals. Without a financial plan you’re more likely to live in the moment, which undoubtedly results in poor financial choices. The steps you take today will set the pace for the rest of your life, determining your quality of life and long-term financial security.
- Translate rands spent into the hours you worked to earn those rands
Time literally is money. Each rand in your paycheck represents the amount of time it took to earn it. (And it’s not just your hourly wage.) Figure out how much time a rand is actually worth to you, and you’ll begin to see your expenses in a whole new light. Ask yourself whether that new digital camera is really worth a week at the office?
‘Before you can start saving it’s important to reduce your debt. Make a list of all your debts; include the outstanding amounts and the interest rates of each debt. Pay off those with the highest interest rate first, as this will minimise the amount of money you pay towards interest. Work out how long it will take you to pay off all the debts. Never deviate from your budget. Never miss a payment as this will damage your credit rating and you’ll struggle to get loans in future,’ concludes Alberts.