What are your #lifegoals? It’s so important to dream – and it helps to know you can achieve it all, you just have to put in the work. This applies to your finances too. Start by setting goals and mapping out a plan to help you reach it. Afterall, if you don’t plan, you plan to fail.
There are end/dream goals which are directly linked to happiness, and money goals which get you closer to what makes you happy.
Dream goals can be divided into experiences, growth contribution and protection – as opposed to simply aiming to reach a certain amount of money. Travelling, studying or giving back all make you feel good and enrich your life.
The money plan
Goals sorted? Now to get you there! Manage your money, assess where you could cut back and kickstart your financial future. Follow this money plan:
- Know your regular monthly income – if your income changes each month, use the average over 6 months.
- Add up your expenses - use your previous month’s bank statement and add similar expenses together as categories, e.g. groceries. Write the amount next to each category.
- Now go through your list and identify unnecessary or excessive categories.
- Decide which categories you want to cut back and write the new budget amount next to each one.
- The more you cut back, the more you can contribute to your money goals.Track your expenses again in the following month to check whether you were able to keep to your budget.
Tip: Stick to your budget by automating your contribution to your money goals each month on pay day. Remember to include the income, expenses and obligations of all the members of your household when compiling your household money plan.
Just get it on credit?
Your relationship with credit is also a big factor in becoming financially healthy. It’s important to understand credit is not simply “free” money. You pay interest on loans, credit cards and store credit – which makes credit an expensive way to pay for things. Only use credit for things that will benefit you in the long term, such as paying for your studies, buying a car that is necessary for your work, buying a house or doing home improvements.
Using credit wisely can help you to:
• Build a good credit record to improve your chances of getting credit when you need it most and at better interest rates, eg when buying a house
• Be in control of your financial life
• Have more money available for your money goals.
Not using credit wisely can lead to:
• Stress and worry, which can have a negative impact on your family and work life
• Not qualifying for credit in the future because of a bad credit record
• Your assets being repossessed
Sbusiso Kumalo, Head of Brand Marketing for Capitec delivered an informative talk at DRUM Live in East London. Now it’s your turn to get clued up on your finances – don’t miss out on our next DRUM Live event in Johannesburg.