Not getting around to sorting out your finances can cost you in the long run. With spring underway it is time to review your financial habits and get on top of your finances. Here are a few ways to become financially savvy.
Do you tend to put off paying your bills until the very last day, or even after they are due? Not paying bills has a more serious consequence than penalty fees. Unpaid or even late bills will reflect at the credit bureau making it difficult to apply for credit.
“There is really no excuse to pay bills late nowadays with all the digital platforms that banks provide,” says Eunice Sibiya, Head of Consumer Education at FNB. “With Cellphone and Online Banking or an App there is no need to delay paying bills or use the excuse that you don’t have the time.” You could also set up debit orders.
2. Create a budget
If you haven’t done so by now, it is vital that you draw up a budget by simply writing down money that comes in every month, versus money that goes out.
“Budgeting can help you save money as it quickly highlights bad spending habits,” says Sibiya. “This is the first port of call in getting your finances under control which will help you manage your money and track expenses.”
Why not try the 50:30:20 method? 50% on needs, 30% on wants and 20% for savings.
Not filing your tax return on time comes with a price and penalties. Make sure that you give yourself plenty of time to collect all the documentation you need, such as IRP5’s from previous employers, tax certificates from medical aids, investments and RA’s. And who knows, you may even get money back.
4. Start saving
Procrastinating over savings will really cost you in the future.
“The money that you’re spending on unnecessary items now, such as entertainment or clothing is money that your future self could be using towards something that will make a real difference to your life – such as a deposit for a house, your children’s school fees or even living comfortably in retirement.”
It doesn’t matter how little you are saving, as long as you are putting something away right now as a start. This is one financial discipline that can’t be put off indefinitely.
TOP TIP: always pay yourself first. Don’t wait to see how much is left after expenses, put your savings away first.