The first day of the New Year always has an air of excitement about it: A new season with the promise of new beginnings. Traditionally we give our homes an extra vigorous clean but it’s also a great opportunity to do exactly that with our finances. Here are 5 simple steps you can take to give your finances a fresh new start:
1. Compare your actual spending to your budget
We all have a budget but somehow our money never seems to balance. The New Yearis a great time to get on track. Create a simple spreadsheet on your computer (or on paper) giving a column to each category in your budget. Now take a month’s bank statement and place each entry into a category. For example, a purchase at a grocery store will be allocated to groceries, data purchases will be allocated to mobile phone. From this you will be able to see what you are ACTUALLY SPENDING on each item. Decide how you can cut down on any wasteful spending or if you need to adjust your budget to make it more realistic. (If you don’t have a budget, get one!)
2. Cancel unnecessary debit orders
Falling victim to good call centre agents is something we are all guilty of. Consequently, we pay for services we don’t really need. From the exercise above you can now see EXACTLY what is coming off your bank account. Cancel all the unnecessary spending on items such as duplicate funeral policies and a hospital insurance that is surplus to your medical aid cover. You may find there are debits running for small amounts you weren’t even aware of. Go into the bank and cancel these immediately – they all add up.
3. Be honest about your debt
Debt is easy to accumulate. It’s a fact that over 12 million South Africans have more debt than they can afford. Debt is also expensive. A large portion of each payment is swallowed up by high interest charges making getting rid of the actual debt difficult. If you can’t service all of your debt every month with enough to live off, there is a good chance you’re over-indebted and on a slippery slope to financial ruin. This doesn’t have to be the end of the world. If you are in any doubt or need help contact us for a FREE NO OBLIGATION ASSISTANCE. One of our trained consultants will explain how our customised debt solutions are the beginning of a bright, debt free future. We will help you save thousands of Rands in interest charges and ensure that you have money in your budget to meet your living obligations while still paying off your debt.
4. Do a credit check
Maintaining a good credit rating is imperative to creating a stable financial future. South Africans can do one free credit check every year. Transunion offers an easy to use service that will alert you throughout the year to any changes in your credit rating. If there is debt lurking that you have forgotten about (yes it happens!) or not servicing, contact us for some solid free advice before you do anything.
5. Sell unwanted items and start saving
Investing in savings may sound like a far-off goal but it doesn’t have to be. We all have unwanted items lying around collecting dust. Sell these and create an instant start a long-term savings goal. Add to this every month and it will soon add up to a small nest egg for a rainy day.