There have been some scary statistics released recently on people getting into debt trouble. Here in South Africa for the last eight years we have been in a boom time and many people have enjoyed the fruits of this boom, but the boom is now over and people still have to pay their debts. When times are good lifestyle debt is not such a problem but now it is and people do not have the savings set aside to support themselves through the tough times. So what can you do to start saving?
- Plan a budget
- Set aside what you can
- Pay off your debts
It may seem simple, and it is, but people are not saving enough. Savings should not be seen merely as the interest you get on your savings account but as a way for you to protect yourself against the future. Money saved is money that is not spent, when you spend the money it is gone, when you save it can tide you over for a rainy day. Given the current global economic situation it is pouring rain right now.
First thing is to plan a budget then you will know exactly what you need to pay every month and what you have left over. As a rule of thumb you should have at least three months of expenses set aside and saved. Instead of taking what is left of your income and spending it, save it. Put more money in your budget into paying off your debts, the quicker you pay them the less you pay. It may not be much fun now, but when the market turns again you will be in a position to really get on with enjoying your lifestyle.