When you are financially informed and educated, you are better equipped to manage your finances responsibly and remain financially healthy, even in these trying economic times.
Financial wellness does not necessarily mean that you need to have a lot of money; it simply means that you have enough savings, are prepared for the future and manage your debt.
As a starting point, you need to determine how much money you have, how much you need to spend and also consider external factors that will have an impact on your expenses.
Here are some key factors and tips to help you manage your finances better:
Consider the current economic challenges:
One cannot plan ahead properly without taking the current economic challenges into consideration. It is therefore important to keep the following in mind when managing your budget:
• School/Tuition fees
• Rise in electricity tariffs
• Fuel increases
• Increase in food prices
• Credit card instalments
• Possible interstate increases
Compile a budget
A budget is a written plan of your total income and expenses. You use it to plan your monthly spending and to:
• Avoid spending more than what you can afford
• Save money for emergencies
• Save money for larger purchases (e.g. furniture)
• Manage debt responsibly
Calculate how much you earn
Combine your monthly take home salary (net salary) with that of your spouse – this is the income after items such as tax, UIF, pension fund and medical aid contributions have been deducted from your gross salary.
Identify and list the type of your monthly expenses:
• Fixed expenses: this includes your bond/rent, school fees, car repayment, DSTV monthly contract
• Changing expenses: this includes groceries, transport, clothes, electricity, water, cell phone
• Luxury expenses: these will be items such as Entertainment, alcohol, soccer tickets, fast foods
After you have worked out your income versus your expenses, you can see where you need to cut back or where you can save more.
For more tips and advice on how to achieve financial wellness, follow this blog and the Iemas social media platforms. You can also speak to one of our consultants today for more information on our products and wellness training programmes. Contact us on 0861 043 627 for more information.
Read other related articles here: What do the current economic changes mean for South Africans? or Reasons why you might be struggling to save.