The benefits of having and managing your budget for the year ahead

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Budgeting may seem challenging, but it doesn’t have to be with the right discipline.  Photo: Getty Images
Budgeting may seem challenging, but it doesn’t have to be with the right discipline. Photo: Getty Images


A South African Reserve Bank report states that about 75% of the average working professional's monthly salary goes toward repaying debt. According to the National Credit Regulator, almost 40% of credit-active consumers have damaged credit records. These shocking figures paint a bleak picture of the financial sustainability and the realities many South Africans face. 

Let's be honest, with the cost of living at soaring heights, inflation and exorbitant fuel prices, many of us cringe at the thought of putting a few bucks aside for a rainy day. Budgeting is difficult. And remaining disciplined in the saving process is a challenge. While we are focused on living in the present, we find ourselves in a financial rut when the festive mode is in full swing.

Get into the budgeting groove

Wikus Olivier, the founder and managing director of CreditSmart, is a pioneer for healthy financial habits and is an advocate for budgeting. In his view, a small saving can go a long way. Maintaining a budget will certainly be tedious, but you will reap the benefits of your sacrifice. 

He has shared insights to help you create a sense of financial security:

  1. Set a realistic budget.
  2. Create a weekly spending cap for daily essentials, such as bread, milk and petrol.
  3. When heading out to the shops, stick to a shopping list to avoid spending money on unnecessary items.
  4. If you find yourself in a position where you cannot save for a particular month due to unforeseen circumstances, try saving extra in the following month. For example, if you can’t save X amount in June, save double the amount in July.
  5. While many want to maintain a certain social status, it’s important to refrain from living above our means. If it doesn’t fit your pocket, don’t do it.
  6. Set money aside for entertainment and stick to it.

Here’s how including small savings in your budget can change your outlook for the year-end. You will have R6 000 at the end of the year if you sacrifice around R500 a month starting in January. As for how much money you should save, there is no golden rule, as it depends primarily on your ability to afford it. A small amount goes a long way, whether it is R100 a month or R1000 a month.

READ: Chris Blair | Do social grants really work?

Budgeting may seem challenging, but it doesn’t have to be with the right discipline. "Budgeting is a habit which you need to exercise. If you do it regularly, it becomes a habit. Habits are things we do naturally, things that we almost do without overthinking. Budgeting needs to become a habit," adds Wikus. 

Make wise money habits a part of your lifestyle and encourage others to do the same. Perhaps you and your family should consider saving small amounts of money together. Your budget will provide a framework to manage your finances and reach your financial goals.

With a focus on credit, debt and financial management, CreditSmart assists consumers with every aspect of their credit, debt and finances.

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