A South African Reserve Bank report states that about 75% of the average working professional’s monthly salary goes toward repaying debt. According to the National Credit Regulator, almost 40% of credit-active consumers have damaged credit records. These shocking figures paint a bleak picture of the financial sustainability and the realities many South Africans face.
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With the cost of living at soaring heights, inflation, and exorbitant fuel prices, many of us cringe at the thought of putting a few bucks aside for a rainy day. Let’s be honest. Budgeting is difficult. And remaining disciplined in the savings process is a challenge. While we are focused on living in the present, we find ourselves in a financial rut when the festive mode is in full swing.
Get into the budgeting groove
Wikus Olivier, the founder and managing director of CreditSmart, is a pioneer for healthy financial habits and is an advocate for budgeting. In his view, a small saving can go a long way. Maintaining a budget will certainly be tedious, but you will reap the benefits of your sacrifice.
He has shared insights to help you create a sense of financial security:
- Set a realistic budget.
- Create a weekly spending cap for daily essentials such as bread, milk, and petrol.
- When heading out to the shops, stick to a shopping list to avoid spending money on unnecessary items.
- If you find yourself in a position where you are unable to save for a particular month due to unforeseen circumstances, try saving extra in the following month. For example, if you can’t save X amount in June, save double the amount in July.
- While many want to maintain a certain social status, it’s important to refrain from living above our means. If it doesn’t fit your pocket, don’t do it.
- Set money aside for entertainment and stick to it.
Here’s how including a small savings to your budget can change your outlook for year end. You will have R6,000 at the end of the year if you sacrifice around R500 a month starting in January. As for how much money you should save, there is no golden rule, as it depends primarily on your ability to afford it. A small amount goes a long way, whether it is R100 a month or R1000 a month.
Budgeting may seem challenging, but it doesn’t have to be with the right discipline. “Budgeting is a habit which you need to exercise. If you do it regularly, it becomes a habit. Habits are things we do naturally, things that we almost do without overthinking. Budgeting needs to become a habit,” adds Wikus.
Make wise money habits a part of your lifestyle and encourage others to do the same. Perhaps you and your family should consider saving small amounts of money together. Your budget will provide a framework to manage your finances and reach your financial goals.
With a focus on credit, debt, and financial management, CreditSmart assists consumers with every aspect of their credit, debt, and finances. Get budget smart with CreditSmart.
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