- Stretch your budget
Every savings plan starts with a budget – so be sure you know what your income and expenses are – including all the day-to-day expenses that are easy to ignore (yes - we’re talking about that daily cappuccino). Once you have a realistic picture of how much money you have and how much you are spending, see what you can do to make your budget stretch through the month, so that you don’t start the next month with a negative balance and can put some money away to save.
- Detox your debt in order to save
Look at all the different lines of credit you hold (including store cards and personal loans) and be honest with yourself about how much the repayments and interest are really costing you. Try pay your highest interest accounts first or, if you are lucky enough to get a bonus, use this to clear some, or all, your debt. Avoid getting into any further debt. The only way to do this is to pay back more than the minimum instalment and to avoid dipping back into that particular line of credit. If you make it a priority, you can do it! Once you have done this, you will have more money available to save.
- Rope in a financial partner
Saving is easier if you do it with a friend. Find someone that you trust and who has the same financial goals as you, and use the buddy system to encourage each other to control spending and saving more.
- Cut out unnecessary spending
For a start, cut out all unnecessary spending – cut down on cell phone usage, review all your contracts, credit cards, retail accounts and start budgeting.
- Separate the “needs” from the “wants”
Separate the “needs” from the “wants” and use the money you would have spent on that “want”, to save. It is about delaying gratification and making sure that you rather save for that new TV than spend money you simply don’t have.
- Less entertainment
Cut down on some of your recurring costs such as entertainment costs or even limit the number of take away’s you have to once a month or cut them out completely, and instead have left over dinner for lunch at work. Doing this will give you more disposable money towards your savings.
- Seek financial advice if you are struggling to save
Anyone struggling to save should seek help through free education programmes (www.truthaboutmoney.co.za) that offer telephonic debt management and counselling to give you ways in which you can manage your money better through budgeting and saving properly.
- Avoid credit
Thereafter, it is essential to try avoid unnecessary credit wherever possible, or rather do without an item that is not needed for survival (delay gratification) than have to deal with the stress and implications that come with over-indebtedness.
- Finally, stay positive
Finally, persevere and remain positive. It is never too late to change your mindset and start getting out of a difficult situation. You need to take control and get into action today.
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