Be smarter with your money

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We’ve compiled a few handy tips to get you started on your journey to financial freedom. HAVE A BUDGET You need to have a solid budget to guide your spending. Otherwise you could become overwhelmed by all the money and spend it without direction. How to: Write down what you need to do before you get the money. Keep your budget realistic. So allow yourself to spend on clothes, movies and dinners but make sure you have accounted for those things in the budget. Draw up a reasonable wish list, which will enable you to break down the amount into smaller, more manageable pieces. Stick to your budget. As you spend, keep a record. Once a week, compare your spending to your budget. Doing so will help you to stay on track. PAY OFF DEBT You may have debts that you pay off monthly, such as R200 for a clothing account or R500 for a household appliance. How to do it: List all your debts and see which ones you can pay off. If you can pay off some debts fully, do it. If you don’t have enough money, pay as much as you can. You should prioritise paying off all debt before buying luxuries. Interest on credit is a yoke on your monthly financial wellbeing. To not be constrained by this will make you far happier in the long run. Start with the higher-interest-bearing accounts, such as credit cards, to be most effective. If you don’t have any short-term debt, you can pay into your bond. Cash injections reduce the term on the bond and can save you a lot of money.”    PAY IN ADVANCE Paying for things in advance will give you peace of mind and set the financial tone for the coming year. How to do it: Make a list of all the things you can pay for in advance and then do it. You can pay things such as your rent or school fees at the beginning of the year, or buy bulk groceries and your child’s school uniforms and stationery for the yearIf you don’t have enough to pay the full amount, pay what you can towards them and the balance during the year. For example, you could pay the school fees for half the year, rent for the next four months, and buy groceries for three months. BUY WITH CASH With the money you have, buy the things you have always wanted – but with cash. If you wanted a bed, fridge or furniture, pay for it with cash instead of using hire purchase. How to do it: Take your time to shop around to compare products and prices and then choose the best deal for yourself. At the end of the year, it’s possible to find discounts so look around. Paying with cash also allows you to negotiate a discount with the seller. DO WHAT YOU WANT After you have done all the things you need to do with your money, it’s time to do as you please with it. If you wanted to renovate a bedroom or bathroom, just do it. Use the money for a holiday or massage. How to do it: This should be easy you have already budgeted for what you want. When you blow your money on things you’ve put in your budget, you should feel glad and excited. Just make sure you do it according to the plan. You can still look for bargains. If you spend less than you expected to, use that extra money to start your savings for the next year.  
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