Nowadays, when money doesn’t ever seem to be enough for all our needs, the end of the month can be a very worrying time. That’s when bills have to be paid and the spending priorities of the next few weeks decided upon. There’s everything from store accounts to school fees, clothes, medical bills, groceries, rent or your housing bond, and the ever increasing charges for lights and water.
The worst thing you can do is to ignore bills and hope they won’t catch up with you or to carry on spending far beyond your resources. That’s the quickest way to end up in a debt trap. And it’s also how you can lose one of your most precious assets – your credit record.
The answer to keeping control of debt and improving your financial standing is to budget, in just the same way as Finance Minister Pravin Gordhan does for the country once a year. And the best way to plan is to look at the whole year then budget for each month. A budget is like a map that tells you how much you are spending and what you are spending it on. With a sound budget, you really can’t get lost because you’ll soon see if you are losing your way.
Here are some tips to help you manage your money successfully:
Check the ins and outs
The first thing to do is to work out how much money is coming in and how much is going out every month. Write down your total income, either for yourself as an individual or for the whole family. Include extras like overtime, rent from extra accommodation you may have and from part-time work done by other members of the family. Then list all the bills you have to pay and your expenses. You’ll soon see how healthy your financial position is. Wonga SA has put together a nice budget template you can use to get started, check out their blog for the download. It is conveniently set up for you in Microsoft Excel format to adopt as is or modify to suit your particular needs.
Set up systems
Buy a few files and use them for all the bills coming in. File them as they arrive and, when you sit down to do your budgeting at the end of the month, you will have them all at hand. Pay them together once a month, usually, the day after pay.
Use another file to store all your receipts and bank statements, plus copies of any letters you have sent or received about your accounts. Start a new file at the beginning of every tax year so that your records run from the beginning of March to the end of the following February.
Remember budgeting requires discipline. There’s no gain without pain. At first, it may seem like a real hassle, but the long-term benefits far outweigh the initial pain. Be sure to keep your old records for at least three years. It’s very important to have original documents if there are any queries later on.
As you get more smart with your money you may want to include other useful tools in addition to your basic budget plan. This article will open your mind to more ideas to make the entire process of managing your money that much easier.