NOT everyone knows where or how to begin to take control of their money.
This is why SunMoney asked Old Mutual’s head of financial education, John Manyike, to speak about their programme during Global Money Week – a week meant to encourage a culture of saving.
Face the facts
Open all your bills, review your bank statements and request a credit report – you are entitled to a free credit report once a year, in your birth month.
This will give you an idea of what your credit profile looks like and alert you to negative listings a creditor may have registered.
Set goals and stay committed
Determine what your goals are and set short, medium and long-term financial goals. The goals must be realistic to be achievable.
Prioritise goals in order of importance, estimate how much you need to save for each, and settle on a time- table.
Be emotionally connected to your goals as this keeps you disciplined when you’re tempted to overspend, such as during the festive season and holidays.
Determine your needs
Cut back on expenses that you can do without and use those savings to pay off debt. If you eat out in restaurants once a week, eat out once a month. The money saved can pay off debt or save for your children’s education.
Stay focused on bad debt
Pay off your most expensive debt first. Your credit cards or store account generally have higher interest rates.
Consider consolidating all your debt into one loan to replace multiple interest charges, service fees and debit order fees with one consolidated payment. The benefit is that the debt-free date is clear.
Budget, budget, budget
Budgets are critical for money plans. Remember: “If you can’t measure it, you can’t manage it”. It is vital that you record all spending if you want to reach personal financial freedom.