Keep track of your spending Picture: Karen Sandison/ANA Archives
When speaking to people in South Africa, the feeling is that the task of saving has been positioned as a sacrifice, which entails giving up things they genuinely enjoy.
The reality is that if we instil a culture of saving within Mzansi by changing the traditional savings approach, savings then doesn’t have to come across as a grudge sacrifice.
Another secret to savings, in addition to making small changes that can have a bit impact on your life, is starting as early as possible. Our youth is all about new life experiences, adjusting to a lot of new things and growing up.
Earning your first salary, moving out of your parents’ house, becoming independent and paying your own bills. Adjusting to adult life can be both invigorating and overwhelming. While it is never too late to take control of your finances, the younger you start, the better your chances of fast-tracking your way to financial success. Here are some tips to help you stay the course.
Setting a budget
There are many upsides to being young. One of the biggest is that you probably have more disposable income than you could ever have dreamed of as you might not have a bucket of serious responsibilities. The problem is that you may not keep track of your spending. It is okay to indulge, but your finances may take a hit without moderation.
Take the time to set a budget. Your twenties and thirties are an ideal time to build your emergency savings and start investing in your financial success.
Remember, you don’t have to completely deprive yourself. Your goal should be to live within your means and make a few tweaks so that you can invest in your future. You will be amazed at how talking to your peers can help you find easy ways to save that don’t feel like you have to sacrifice a life you deserve and enjoy. It is all about making small adjustments that will see you win in the long term.
Saving
You should be saving. If you’re spending everything you’re making, it's time for either a readjustment of your choices – or your attitude. Remember that savings doesn’t have to be difficult – it can be small changes that you make, such as being part of a lift club to save on petrol, purchasing clothes when they are on sale or something as simple as taking a packed lunch instead of buying lunch every day when at work.
Take a different view on savings and investigate where you can make changes that can assist you in saving. It is also important to remember that taking out risk cover such as a funeral plan and life cover can help you save in the future as this cover will assist you when life happens, and you have the benefit of not having to dig into your already stretched pocket to fund some of life’s eventualities and unforeseen circumstances.
Preparing for a life change
Thinking about and preparing for financial obstacles can help you avoid later heartache. A steady salary today does not guarantee one in the future. What if you get sick? Or something happens that needs a rainy-day fund? All these things are important to consider. Unexpected expenses are bound to come up, but with a little forethought, you’ll be ready.
Remember, though, not to worry yourself sick over things that probably won’t come to fruition. Ideally, having some extra money set aside provides you with security and peace of mind so that you’re not overcome with financial anxiety. Your twenties and thirties are an excellent time to consider what life changes could happen in the next several years and how they could affect your finances.
Feeling uncomfortable talking about money
Most people grow up being told that talking about money is impolite. However, it is important to have money conversations with your collective and not function in a financial silo. Having the money conversations allows you to manage expectation and set some money values in place.
While the final say in how you use your money and how you prioritise is yours, having money conversations can assist you, especially when you are considering decisions that can have a huge impact on your finances.
Failing to plan
A good financial plan is absolutely necessary to maximise your income, help you become smart with your money and avoid unnecessary financial hurdles. Again, you don’t have to feel fearful about having a financial plan. If you don’t know where to start, you may want to consult a registered financial advisor to help you craft a plan that will see you flourish financially.
* Ntuli is a chief marketing officer at Metropolitan.
PERSONAL FINANCE
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