5 'fail-proof' questions to get your budget under control | Fin24
 
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5 'fail-proof' questions to get your budget under control

Apr 20 2019 12:43

With the rising cost of living, escalating fuel costs and slow economic growth, times are tough for SA consumers and it is, therefore, not surprising that they are looking for ways to make their money go further, according to Susan Steward from Budget Insurance.

South Africans should not ignore the value of savings and reducing their existing debt, she warns.

"It is better to work with the money you have than to depend too much on future returns which could be short-term," she suggests.

Steward offers what she calls 5 "fail-proof" questions to get your budget under control:

1. Where does my money go every month? 

Go through your account transactions for the last three months and spend a few hours going over everything.

What is costing you the most - food, clothes, airtime, petrol? Assess how to reduce spending so much in this area.

2. Am I using the 50/20/30 plan?

When you receive your monthly income, adopt the 50/20/30 rule.

Budget 50% for necessities like rent, bond and groceries. Budget 20% for your savings (including retirement funds) and 30% for your lifestyle expenses like entertainment, clothes and holidays.

"Knowing you have a budget within which to play – after you've paid your bills and put money aside – will give you a certain amount of financial freedom," says Steward.

3. What are my savings goals?

Staying away from the money building up in your savings account is easier if you have a goal in mind, in her view.

"Remember what you are working towards, whether it is saving for education, a holiday or getting your debt paid off. Having something tangible to save for will help keep you motivated," she explains.

4. Which tools can I use to save?

If you are using apps to track eating habits, exercise routines and loyalty rewards, why not your money?

Steward says there are many free budgeting apps these days that will help you stay on top of where you are with your money. Daily push notifications will encourage you to stick to your goals.

5. Why am I battling to pay off debt?

Don't waste your hard-earned money paying interest on your debts. Start by paying back some of your smaller debts and those with higher interest rates as these add up quickly, she suggests.

Also, be sure to save up before a large purchase so that you can put down a decent deposit and speed up your repayments, therefore, saving you money.

savings  |  budget  |  money  |  consumers  |  debt
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