Most of us have made ourselves the promise that we will start saving next week/month/year, only to not follow through when that time period comes. The truth is, it’s difficult to save money. We also live in an economical climate that doesn’t make it easy to save money each and every month.
With the constant increases in the prices of goods and petrol, coupled with slow salary growth, the basic cost of living feels unaffordable at times. With basic living costs taking up much of your hard-earned salary, there’s often little to nothing left over to put into the kitty.
Why Are You Not Able To Save?
If you feel like you struggle to save for a rainy day, there may be a few reasons why. Let’s try determine what could be holding you back and see if there’s a way to buck the trend. These are the 3 main reasons you may not be saving currently:
1.) Luxury Expenses
This may be one of the most common reasons for consumers not saving any money. Large portions of your salary are going towards expenses that the average person would deem as luxurious. Fancy clothes, expensive restaurants, extravagant holidays and coffee dates may be costing you a lot more than you think they do.
By cutting down on a few luxury expenses each month, you could find yourself with more cash in your pocket. Instead of buying clothing each month, rather try to save up and buy items that last-longer and are not high-fashion items that only last one season.
Instead of eating out at restaurants or getting takeaways, try cooking more often and make enough for lunch the next day. Buying food and supplies in bulk can also save you money.
2.) Poor Budgeting
Many people never give budgeting a proper chance. A budget can’t be done in your head only or at the end of the month. A budget needs to be planned and forecasts need to be made. Most importantly, your budget needs to be tracked and compared at month end using real expenses. By looking at the real numbers you can see exactly where you overspent and identify the areas that need work.
Try break your budget down into categories such as Fixed Payments, Variable Payments and Miscellaneous, for example. A proper budget will make you think twice before splurging out on unnecessary items.
3.) Too Much Debt
South African consumers are in a household debt crisis. The number of consumers with accounts in arrears is at an all time high. Many people run out of money before their next pay day and are forced to use credit cards, overdrafts and pay day loans to make it through the month.
If you feel you have too much debt and rely on it every month, you may be over-indebted. Being over-indebted means that your income is not enough to cover your debt repayments and living costs each month. If you think you are over-indebted, you should speak to a debt counsellor. A debt counsellor, such as Vantage Debt Management, will formally negotiate with your creditors to reduce and consolidate your monthly installments and minimize interest rates.