Do you know many families who aren’t struggling to make ends meet? And, of those who do manage to meet their monthly commitments, how many can afford holidays, overseas trips, renovations to their homes or purchasing new cars?
Executive Head of Transactional Banking at Momentum Multiply, Megan Harrison, says maintaining a healthy financial state is not easy for South Africans, especially in the current economic climate. “Although the official inflation rate is 4.5%, the reality is that prices of some essential goods and services increased much more”. This leaves families with less disposable income and higher expenses, making it challenging to balance their budgets.
Harrison says achieving financial wellness during difficult times necessitates additional effort.
Here are a few easy steps she recommends to help you improve your financial health.
1. Tackle your debt
Make a determined effort to pay off your debt and not take on any more. Ensure that you pay monthly instalments on time to avoid incurring unnecessary fees and interest charges. Although you will save more over time if you repay debt with the highest interest rate first, it sometimes is easier to repay the smallest debts first so that you can free up some cash.
2. Do it yourself
Instead of hiring someone to do odd jobs around the house, do them yourself. Of course, this does not apply to complicated plumbing or electrical jobs. But, if something needs a coat of paint or basic fixing, you can save money by tackling them yourself.
3. Shop wisely
Jot down a shopping list before going to the shops and decide how much you are going to spend beforehand. “Going shopping with a list keeps us focused on what we actually need to buy, rather than splashing out on luxuries we don’t need, and can’t really afford,” says Harrison. Also, check out the local newspapers for specials.
4. Embrace rewards programmes
And while we’re on price discounts, many South African brands offer rewards programmes for your loyalty, or to encourage habits which enhance overall wellness. Take advantage of these rewards programmes to increase your disposable income, or kick start your savings. For example, an average Gold Member on Momentum Multiply usually saves R1 000 per month. This can be used to pay off debt faster or build up emergency savings.
5. Save on the small things that you can grow into bigger savings
Saving is a critical habit to secure a better today and tomorrow for you and your family. Always try and put some money aside every month to ensure you have cash on hand for emergencies, holidays and for your retirement.
6. Make home-cooked meals
A family of four can easily spend more than R400 on takeaways, even more, if they sit down for a meal at a restaurant. Planning meals in advance and cooking at home can save you a lot of money. And it’s probably a lot healthier too.
7. Draw up a budget in accordance with your financial plan
Get a picture of what your monthly income and expenses look like. Use your bank statements and bills as a starting point. Include everything, even those spontaneous cash withdrawals. This will show you where you’re spending the most money and where you can cut down. But, ensure your expenses remain in accordance with your financial goals as set out in your long-term financial plan.
You might also want to read up on practical ways to save on groceries.