EVEN people with plenty of money can suffer if they have bad financial habits.
Take lottery winners for example. About 70% of winners end up with very little or no money within a few years.
This can be put down to poor financial discipline before they had the windfall.
For most salary earners, money comes in and then swiftly goes out of our bank accounts every month, and we seldom think too deeply about it – it’s just the way it is. Until, of course, we run out of money. Which, for some, seems to happen every month.
So how do we go about changing our habits and managing our money better?
1. Write down a log of all your spending.
This will help to see where your money is going each month and highlight where there might be the potential to cut back.
2. Work out a budget.
Set aside portions of money from your monthly income for the things you need – food, vehicle costs, rent or bond payments, activities, clothing and so on.
Then – most importantly - stick to your budget!
3. Aim to save.
Remember when setting your budget that in order to save money, you need to spend less than you earn. You should therefore also try and include money to save in your budget.
4. Put aside money for a rainy day.
Part of your saving could be to set aside a personal emergency fund. Plan to put the same amount into it every month, even if it’s cash kept somewhere safe, and make sure you do it without fail.
If you need a little help with saving, most banks and financial service providers will have advice on their websites, or you could consider enlisting the services of a financial advisor. You can also download apps for your phone or tablet that help you track your spending.
Digital learning platform Educate24 also offers a course on the Basics of Personal Budgeting. It is well-suited to individuals as well as couples who want to budget together.
