Tips to take control of your finances

Don’t allow your hard-earned savings to suffer during the downtimes, writes Michelle Beetar.

Don’t allow your hard-earned savings to suffer during the downtimes, writes Michelle Beetar.

Recent unemployment figures and findings that salaries are barely growing above inflation suggest that the coming months are going to be challenging for the average South African household.

These are all indications that a more conservative approach is going to become even more essential in our personal financial planning to navigate what could be some volatile months ahead.

Earlier this month, Stats SA released its quarterly employment figures revealing that 15 000 jobs were lost during the first quarter of this year.

Those that have not lost jobs will still feel the impact of the economic downturn as May’s BankservAfrica Disposable Salary index reveals that the average South African wage increase is barely above inflation.

Read also: Women more likely to face poverty during retirement

However, there are ways to survive without compromising on hard-earned wealth.

During times such as these, our first instinct is to dig into our savings to maintain our current lifestyle. However, a mind shift to understanding it is more beneficial to cut down on expenses and find ways to manage money as an intervention measure would be more beneficial. This is a far better option than having to face the prospect of inadequate funds for an emergency or a rainy day – or even retirement one day.

Read also: South Africans are saving less

With National Savings Month underway, here’s how you can take control of your finances:

Smart spending

A careful balance of your income against your expenses can be beneficial not only in the short-term, but also in the long-term. It is advisable to take a smart approach of identifying what you have versus what you really need. By identifying what you cannot simply live without, you are able to prioritise your spending and ensure that money can be used elsewhere and for better purposes.

Identifying ways to cut down

We all have service contracts that are essential for our everyday lives but do we really know the minute details? By carefully assessing your contractual agreements – and monthly billings – it becomes easier to identify the unnecessary add-ons and still receive a service that covers your basic needs. This is one way to cut down effectively.

Keeping check of your credit report

Sometimes it can be a tough month and we can easily slip up on a monthly payment. While it is advisable to notify the credit provider as soon as possible and see if a payment agreement can be made, it is also important to regularly check your credit report using services such as Experian’s CreditExpert, which allows you to ensure your credit report it is up to date and accurate. This will help you to protect your credit reputation, which is beneficial in the long-run when you are ready to apply for credit for a purchase as substantial as a home loan.

Lenders usually look at a consumer’s repayment behavioural trend as part of their decision-making for granting credit. Your credit report is also a way for you to keep an eye on your existing credit accounts so that you can identify any unusual activity, and ultimately protect yourself against identity theft.

Michelle Beetar is MD of Experian South Africa. Her opinions are not necessarily those of Independent Media.

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