Are you tightening your financial belt in order to better weather the current economic storms battering South Africa? From the country’s credit rating downgrade to junk status, to political scandal and turmoil, another recession and the likely imminent crash of the Rand, there are a lot of reasons to be worried about what the future has in store for your finances. That’s why getting smarter about personal finance right now is a very smart move indeed.
From rising costs of living, to job losses, there could be plenty of different financial pressures which strike everyday South Africans as a result of the current upheaval. While it’s impossible to be sure of what the future may hold, it is possible to take steps to reduce the potential negative impact of money troubles.
With a reputation for spending instead of saving, learning about saving and budgeting is now a crucial lesson for South Africans who want to stay afloat during this potentially tricky economic period. Saving more and spending less may sound relatively straightforward, but it’s not an easy commitment to keep – and there are lots of ways you can do it better.
To help you save more, spend less and develop a healthy financial “safety net” we’ve put together some helpful tips, inspired by the informative Money Academy…
- Live healthier
It may seem unrelated to your finances, but living more healthily can help you spend less and save more over the long term – for a variety of reasons. By choosing free health-boosting fitness-improving activities during your leisure time you can save money on things like recreational shopping sprees, cinema tickets and bar tabs.
Choosing healthy, home-cooked vegetable-based options instead of takeaways, restaurant meals and ready meals will also help you pocket plenty of extra change. At the same time, both of these steps will improve your health, often resulting in lower medical bills.
- Embrace envelopes
Envelope budgeting methods are very effective for many people who are striving to save more money – and they’re very straightforward to use. First calculate your outgoing monthly expenses , then decide how much you will be spending on them each month. Some expenses, like bills, will be non-negotiable. Other costs, like food, can be reduced by savvier shopping.
Once you’ve assigned an amount to each expense, draw all the cash you’ll need and put each calculated amount into an individual, labelled envelope. When the cash is gone, it’s gone, forcing you to stick to your new budget.
- Use “the stranger test”
Before making any unnecessary purchase, perform “the stranger test”. Imagine a stranger offering you the item you’re considering buying in one hand, and the amount of money the purchase is worth in the other. Take a moment to clearly decide which you’d rather have in order to stop making wasteful purchases.
Do you have any clever tips and tricks for spending less and saving more? Are you trying to reduce your spending and put more money away as a result of the current economic climate? Have your say below.