Spring is around the corner, which means it’s the perfect time to spring clean. While sorting out your wardrobe, now is also a great chance to clean up your budget!
South Africa (22 August 2024) – Spring has almost sprung. Metaphorically, it’s a time of fresh starts and renewal, honoured by the age-old tradition of the annual spring clean. While sweeping out the cobwebs at home, take some time to consider the dust that lurks in your budget.
“A few smart, practical adjustments – especially when it comes to settling debt, planning wisely, cutting costs and saving – could bring about a positive financial change of season,” says Tyrone Lowther, Head of Budget Insurance.
To help you kick start your budget spring clean, Budget Insurance recommends asking yourself these nine questions:
1. Have you updated your income and expenses?
If the last time you reviewed your budget was in January, consider the significant changes that have taken place since then. An up-to-date budget gives you a good idea of where you need to save more or where you now have a couple of rands free to pay off debt a bit faster.
2. Have you been slack in paying off your debt?
Between credit cards and store cards, it’s easy to get caught up in buying on credit and forget about all the amounts you’re racking up along the way. Make sure to go through all your statements and pay off outstanding debts, or at least put a plan in place to do so.
3. Are you cutting corners where you shouldn’t be?
We all know which costs are most likely to get the cut when it comes to budgeting and one of them is insurance. The question however isn’t whether you can afford to be insured, it’s can you afford not to be. Without the right cover you could be in a far worse-off financial position if, for example, your car is written off or your house is robbed.
4. Are you willing to compromise and reprioritise?
You love that expensive perfume, you really want those new designer sneakers, you can’t live without the pricey steak once a week but when you’re feeling the squeeze mid-month, you may find yourself regretting those lavish purchases. Don’t get in a position where you have to compromise on the important things – the non-negotiables. Instead, compromise – find a more affordable fragrance, do without the sneakers and have that steak once a month.
5. Have you been sticking to your saving goals?
There are many ways to help break the bad habit of not saving that will force you to save every month. This includes things like setting up a monthly debit order to an investment account, opening a tax-free savings account and increasing your pension fund contribution.
6. Do you save for emergencies?
What if you were in a situation where you needed money urgently, like if you were laid off at work or your car needed major repairs – where would you get the cash from, and how quickly could you get it? It’s not something pleasant to think about, but it’s vital to have that safety net in place. The amount you save towards an emergency fund depends on your personal circumstances, but ideally, an emergency fund should cover three to six months’ living expenses.
7. Do you track your spending?
This isn’t about scrutinising every cent you spend but rather establishing spending patterns to identify possible areas for saving. A good way to do this is to look at your monthly bank statement and see where most of the money is going. You may be surprised at just how much you’re spending in certain areas and how, by making small changes, you could keep your spending in check.
8. Are you paying unnecessary and outdated fees?
Are you paying subscription fees for magazines you don’t read? Membership fees for a gym you never go to? Fees for a bank account you no longer use? This is wasted money that could be going towards saving or paying off debt, so cancel these to free up extra cash.
9. Are your rewards programmes actually benefitting you?
Many of us are part of loyalty programmes offered by entities from banks and supermarkets to healthcare providers. Understanding how to make the most out of these programmes is critical to really enjoying their benefits – from earning the most amount of points to receiving the highest possible discount or cash back. Read the terms and conditions and frequently asked questions on the relevant websites to ensure you know exactly how and when you should be rewarded.
“Answering these questions fully and honestly will give you the perspective and insight you need to make better budgeting decisions and put a spring back in your financial step,” concludes Lowther.
Sources: Supplied
Don’t ever miss the Good Things. Download the Good Things Guy App now on Apple or Google.
Do you have something to add to this story? Please share it in the comments or follow GoodThingsGuy on Facebook & Twitter to keep up to date with good news as it happens, or share your good news with us by clicking here or click the link below to listen to the Good Things Guy Podcast with Brent Lindeque – South Africa’s very own Good Things Guy. He’s on a mission to change what the world pays attention to, and he truly believes there’s good news around us. In the Good Things Guy podcast, you’ll meet these everyday heroes & hear their incredible stories:
Or watch an episode of Good Things TV below, a show created to offer South Africans balance in a world with what feels like constant bad news. We’re here to remind you that there are still so many good things happening in South Africa & we’ll leave you feeling a little more proudly South African.