In a rapidly moving economy with countless new incoming luxuries & gadgets and ever changing prices of stable products, it is becoming increasingly more difficult to be financially stable. So how does one find stability in an ever changing environment?
The great news is that it all starts and ends with you. If the economic environment is ever changing, stability can only come from you. Yes, there are websites and apps which can help you budget and there are debt counsellors who will take a load off your shoulders with their assistance, but the responsibility of becoming financially stable lies with you.
More great news is that there are certain habits which you can easily adopt which will help you tremendously on your path to stability and a financial peace of mind. Let’s take a look at some of these.
Review your monthly transactions and build a budget
Collect your past 3 months’ bank statements, separate the income and expenses then categorise each transaction. Microsoft excel works perfectly well for this type of exercise and there are plenty apps and websites which could help too. This will help you to clearly see where all of your money is going and in what proportions.
Once this is done you can create a budget on how you will better spend your money going forward. Do this periodically to keep checking on yourself.
Isolate and analyse your debit orders
It is vital that you understand these monthly payments, in particular – your debt repayments. It is possible that you are paying for unnecessary debt and/or that your multiple debt repayments are not structured favourably and are hindering you. Once you have a grasp on what your debit orders are and find that they’re way too high, consider contacting a debt counsellor. Debt counsellors assist in restructuring your multiple debt payments into one lower payment which will make life much easier for you.
Use your DEBIT card not your CREDIT card
By using your credit card for little daily expenses you are accumulating more debt and heading down the road to financial distress. If debt puts you under stress then simply avoid accumulating more debt. By paying with your debit card you are using the actual, interest free, money which you have earned.
Plan shopping avoid impulse buying
When shopping for groceries and other necessities make sure you have planned when and what to buy. Most people lose a lot of money by falling into the trap of impulse buying, where they purchase items they they want only in that moment. This is difficult to keep track of and can slip under the radar when looking at your transaction history. It is therefore best to plan your shopping and to stick to it. Do not buy unnecessary items, once this becomes habit it becomes easy. Discipline is key.
Once you have started cutting your costs you may find that you have some spare money every now and then. This does mean you’re out of financial distress and you should splash the cash. We all know that feeling of having some spare money at the end of a rough week and you simply want to treat yourself. The problem is that financial burdens do not come about planned and the spare money you splashed last week, on an already forgotten fine dining dinner, could have relieved you during the unexpected increase in the petrol price. Save your spare money, it will most certainly come in handy and you will be very happy you did.
Save money in place of using a credit card. For instance, let’s say you feel you need some new clothes which you haven’t budgeted for so you’d opt to use your credit card. This will be accumulating further debt. Rather, save your spare weekly money and use this in the coming months to purchase the clothes. Discipline is key.
Save for your future. Whether you have children who would like to have a good education or for the days when you are retired, it is imperative that you save for your future. Sadly, the majority of South Africans do not save enough to be able to retire and their retirement years are filled with hardship and regret. Avoid this by being smarter with the money you have earned.
Once you have reached the point where you are able to save, the best thing you could possibly do is save. Do what’s best for you.
Now that you are more knowledgeable on how to set financial stability around you it is time to put it into action.