Newsletter • Quarter 1 • 2024
WHY BUDGETING IS IMPORTANT
AFTER THE recent 2024 budget speech, WE SHOULD TAKE LESSONS from THE government, assess our finances, AND plan for prosperity.
USING a budget helps you TO control your spending AND take charge of your finances!
Secure your future and achieve your goals
By using a budget, you can plan for your expenses ahead of time, avoid surprises and make sure that you focus on saving for your future.
The benefits of budgeting
- A budget lowers the stress of paying expenses, and enables you to pay your bills on time.
- When you are spending less than what you earn, you won’t need to tap into your savings or borrow money to make ends meet.
- Ideally, you will avoid overspending, but if you do overspend, a budget will lessen the impact of any financial disasters.
- A budget can show your spending habits and make it easier to spend less in the future.
- Budgeting can help you save for goals such as a home or a new car.
- You will be able to save more money for your retirement.
- A budget will give you peace of mind, knowing that your finances are in order.
4 steps to KEEPING a monthly budget
1
Track your spending
You should start by tracking your actual spending over a month. You can use an app or you can do it manually by saving receipts and adding up your expenses yourself.
Did you know that there's a budgeting tool in the MyWoolies app under the
MyInfo>MyPay tabs?
MyInfo>MyPay tabs?
2
Set your financial goals
Setting your financial goals puts you in charge of your money. When you set financial goals, you decide how you are going to use your money in the future.
- Each goal needs to be specific.
- Keep your goals simple.
- Give your goals a rand figure.
- Give a time frame for all your goals and set realistic deadlines.
3
Shrink your debt
Shrink your debt and pay off the money you owe. This is another step towards saving for retirement. Debt stops you from saving – you pay interest on debt and it all adds up.
Debt destroys your chances of saving for a sustainable retirement, let alone saving for something special. You cannot save because you are continually paying off debt – a bond, a car, credit cards, retail accounts, loans – the list is endless.
- List all your debts and the date you want to settle them.
- Get rid of high-interest-rate debt first. These debts are costing you the most money.
- When you can afford it, make additional payments or increase the amount of your payments.
- Once one debt is paid off, use those repayments to pay off the next debt... And so on and so on.
4
Save for your future
Start saving now. The sooner you start, the sooner you will get there.
- Create a clear plan to keep your savings on track.
- You don't need to earn more; you need to spend less.
- The most important thing you can do for yourself and for your family is to save for your retirement.
- Save first – spend afterwards. Every month, before paying your bills and other expenses, first set aside (into a savings account) the money you want to save. This is much easier than trying to save whatever is left over at the end of every month.
- Even small amounts can make a big difference.