As we start a new month and put January behind us, it’s time to relook at our financial plan and get on the road to better money management. Also, COVID-19 continues to be part of our lives, bringing uncertainty. We therefore encourage consumers to focus on managing their money effectively and taking charge of their financial future.
Dhashni Naidoo, FNB Consumer Education Programme Manager says, “Money management has never been more important, and we encourage consumers to follow these practical tips to improve their personal finances. This will help consumers to keep track of where their money is going, budget and keep aligned with financial goals they’ve set out for the year 2022.”
Naidoo shares five tips to reduce your financial anxiety:
Revisit your budget - It is important to write down all your income and expenses to give you a clear picture of your financial status. You can then start planning how to spend your money. An important part of budgeting is to look at non-essential or luxury expenses. See how you can reduce spend on these items. You should also look at how to reduce your spend on variable expenses. Variable expense are expenses that change depending on usage – for example, electricity or fuel for your car. Use less and spend less on variable expenses. You should always strive to have a budget where you are spending less than you earn.
Proactively manage your debt - Paying off debt sooner will save you money. Try to pay a little extra towards your debt each month and consider paying off debt with higher interest rates sooner. If you are struggling to make repayments, contact your service provider to seek assistance and don’t ignore the fact that you owe money.
Have an emergency savings fund – Which can be used for emergencies or loss of income. It is advisable to save between 1-3 months’ worth of your monthly expenses. Start with small amounts each month and increase this amount as you become better at it. Try to automate savings, so that the amount automatically transfers to a saving account on pay day.
Join a Stokvel or find a saving buddy – Saving in a group is a good way to keep you focused and help you develop the habit of savings. Stokvels or a savings buddy are good ways to help you develop the discipline and habit of saving regularly.
Invest your money for the long-term – Get advice from your bank or a financial advisor on where to invest your money for the long-term. There are different investment products to consider, such as a Tax-free savings or shares, exchange traded notes (ETNs), fixed deposits, property, retirement annuities just to name a few. Get more information about these and try to develop an understanding of how the different investment products can help you better plan for a better life in the future.
“How you manage your money will go a long way in assisting you with any challenges that may or may not occur this year. Be financially smart and let money work for you not against you,” concludes Naidoo.