South Africans admit their worst financial mistakes – here’s how you can best avoid them

Man embracing money before spending it.
Man embracing money before spending it.
RapidEye/ Getty images
  • South Africans recently took to a Twitter post to share some of their worst financial mistakes
  • Our money experts weigh in on how to best avoid falling for the same misconceptions
  • Read more stories on Move!

The coronavirus pandemic and lockdown has made finances a hot topic – one that many have to deal with on a daily basis. This has been a good time to either have some serious financial planning conversations, or to reflect on one’s mistakes and see what you’ve been doing wrong in order to have a healthy bank balance to survive the financial strain brought about by the time we’re living in.

READ | How should you approach your finances during and after the Covid-19 pandemic? Expert weighs in

Recently, a Twitter user named Bright Khumalo, an analyst at Vestact Asset Management in Johannesburg asked Twitter users what their biggest financial mistakes were.

The responses poured in and common themes emerged, from buying a car they couldn’t afford at the time to overspending.

See the posts below:

We’ve compiled a few articles consisting of advice from buying that new car, renting a house to saving for an emergency fund so that you can avoid or get out of the same financial mistakes.

READ | Here are the ins and outs of buying a car on guaranteed future value financing

You’re being given the chance to buy a new car with monthly repayments that are almost half of what most other customers are being charged. And the cherry on top: at the end of four years you’ll be able to exchange it for a new model.

This is what’s known in the trade as guaranteed future value (GFV) financing and it’s becoming increasingly popular with motorists as it offers them a more affordable way to ensure they drive a new car every few years. But before you get yourself locked into one of these contracts, make sure you read the fine print.

READ | 7 things to check when doing your online shopping

These days consumers are spoilt for choice – apart from online, many traditional consumers have joined the digital marketplace. During the Covid-19 pandemic, more people are shopping online instead of going to physical stores so they're not exposed to the virus in anyway.

An expert weighs in on a few things to keep in mind before you whip out your credit card and start your online shopping spree.

READ | Here are some shopping tricks to help you spend less

Overspending or spending beyond one’s means was a recurring theme in the users’ responses. Thankfully, there are some smart money habits that can help you spend less, and still have much to spend on yourself. Above all, you should closely track where your money is going and be more aware of your spending habits in order to eliminate unnecessary spending.

An expert weighs in on smart shopping tips to help you save money on spending.

READ | Are you renting a home? Here are 5 things you need to know

Before you sign on the dotted line it’s important to read the fine print of your lease agreement. If you don’t, there could be some nasty surprises in store for you.

“If you cannot reach an agreement with your landlord or their agent, you can approach the Rental Housing Tribunal. It’s an objective third party and will base its judgements solely on the facts presented to it”.

An expert weighs in and answers some important questions relating to rental property and finances.

READ | 3 reasons you need to save for an emergency fund – and how you can do it

When you’re living from pay cheque to pay cheque, the idea of saving for a rainy day can seem like a pipe dream. But if there’s one thing we know for sure, it’s that there will always be rainy days.

From unexpected medical expenses, car repairs to a school trip you hadn’t planned for – financial curveballs come in many forms and it definitely helps to be prepared for things that are not included in your monthly budget.

“When the unexpected happens, we need to ensure it’s not financially ruinous. Even a small unexpected bill could see us having to go to a loan shark or sell assets or investments.”