Newsletter • Quarter 1 • 2025
Some Simple Money Tips for a Better 2025
Twenty-twenty-thrive! with these suggestions:
1
Manage your debt
Having no debt is ideal, but it can be useful for essentials like housing and transport.
- Housing: Ensure that you can afford the monthly payments even after any interest rate hikes. Aim for a home loan instalment under 25% of your net take-home pay.
- Vehicle finance: Keep instalments under 10% of your net take-home pay and consider a car worth no more than 25% of your net annual take-home pay.
- Overwhelmed by your debt? Consider this alternative strategy: pay off the smallest debt or the one with the highest interest first while making minimum payments on the rest.
- Pay more than the minimum repayment. Even a small extra payment each month reduces debt faster and saves on interest.
- If possible, avoid debt! If you want to purchase something, rather save for it instead of buying it with a credit card or on account.
- Speak to a certified financial planner. They can help you budget and develop a strategy to better manage your debt.
2
Start an emergency fund
If you have an emergency or any financial distress, you may be forced to dip into your savings, or worse, be forced to borrow money and create unwanted debt. This is where having an emergency fund is vital.
A general guideline is to save three times your necessary monthly expenses in a separate emergency account.
3
Create a budget
Start a spending diary so that you can see exactly where your money goes. It can help identify unnecessary spending and allows you to make better decisions.
- You can then create a budget for your spending going forward.
- List the essentials first, such as rent, food, transport and utilities.
- Then include debt repayment by setting aside a small amount each month.
- Also save what money you can each month for emergencies and future goals.