It’s Easier Than You May Think: Managing Your Finances Doesn’t Mean Being Stingy
There’s nothing that stings more than being called stingy, even if some of the world’s richest people got that way from pinching pennies. However, it’s possible to get your finances in order without coming off either rude or broke or worse: a combination of the two. While there are plenty of apps that can manage your finances, it takes a shift in mindset, too.
Yes, being frugal is an undervalued and unappreciated skill, because it takes a fair amount of discipline and a great deal of planning. There are various things to take into account when outlining priorities before setting out to manage your finances. And the older you get, the more essential it becomes, because saving for that ‘rainy day’ may turn out to be more useful than you may think. So unless you hit the jackpot after buying a lotto ticket, it would be practical to jot down some of the below points. But! If you have some extra money lying around, you could even grab a South African Lottery ticket. Who knows, it might be your lucky day… But we digress. On to the financing tips:
Track every Rand going in and going out
When your finances are looking you right there in the face every day, they’re hard to ignore. If a budget seems just too wild a concept to even think about just yet, then start with simply tracking what you’re spending – with each and every purchase – and what you have incoming – with each paycheck.
This works best in a spreadsheet, which is free on Google Sheets. Across the top, you can have columns for Date, Description, Income, Spend, and Amount. By entering everything, and getting into the habit of tracking everything each day, you know exactly where your money is coming from and going. You can even do some calculations on your columns to see how much you are spending every week and month, or compare to the last week or weeks, or the last month or months.
Once you start doing this regularly, you may find that you start making different purchasing decisions: thinking about writing into your tracker will make you reconsider your choices just by default.
Do a budget
Once you have a routine of writing down all your incoming and outgoing money, coming up with a budget can be less difficult. If you put each individual spend into a category, you will see what percentage of your funds are going where each week. You can do this by simply adding another column to your spreadsheet: category. People usually have the following categories in their household budget, but feel free to add more:
- Housing
- Utilities
- Transport
- Food
- Health
- Debt payments or savings
- Entertainment
- Miscellaneous
By doing a little bit of spreadsheet magic, you can work out what percentage of your spending goes to which categories each month. After this exercise, evaluate. Do the percentages seem fair? Too high? Work out what you think should be the right percentage for you or your family, everyone is different. Remember to prioritise the essentials out of your paycheck.
Look into refinancing your debts
Have some debts? It might be time to refinance. It can pay to shop around at different loan providers to seek out a better deal. Refinancing an existing loan can lead to huge savings in the right circumstances. If you have payday loans, roll them over to a bank. If you have bank loans, shop around for a different bank and ask them what their best deal is.
Here’s the thing: each provider wants to offer this service as they receive money from you, so they want your custom and they will be competitive about it.
Always look out for a deal
About to make a big purchase? Wait! Before clicking that Buy button, do some searching on the internet to see if you can get it on sale or find a coupon for a website to buy it on. While the Edge browser isn’t as popular as Chrome or Safari, it now has a coupon and promo code finder built in, to help find you the best deals. It can also pay off to see reminders on your calendar for big sale dates such as Black Friday so that you can make all your bigger purchases then, at a cheaper price.
When you are at the supermarket and you see a good deal on an item you buy regularly and it has a long shelf life, then stock up, allowing the future you to save money! However, don’t buy items on special just because they are on special if it’s not part of your regular grocery shop. Budgeting is designed to remove these extra purchases you wouldn’t normally make – even if it is a great deal.