2 minute read
BUDGETING WISELY IN TIMES OF CRISIS
In a low-interest environment, such as currently experienced in South Africa, it can become more and more difficult to live on a fixed income basis. There are, however, ways in which one can manage one’s money more effectively in order to optimise its value. Here optimisation does not necessarily mean taking more risk with your money or investing in other asset classes. The route is much easier and much simpler than one might think. The secret lies in planning, and the core to the success of planning effectively lies in self-discipline.
Careful planning and taking cognisance of spending habits can lead to a level of financial freedom that can be enjoyed by all. This starts with budgeting realistically on a monthly basis. The first priority is always to take care of your basic human needs and to make sure you have enough money available to fulfil those needs. But budgeting is not just about basic human needs – it is also about living the life you have planned for yourself. In order to achieve this level of budgeting, it becomes very important to not only look at monthly expenses but to break them down into weekly needs, and daily needs and wants.
This is not always easy to achieve but most things that are worth it, aren’t. Weekly and daily needs budgeting are more about planning your week and planning your day than they are about financially budgeting for your week or your day. Effectively planning your week and your day, especially your weekends, will allow you to prioritise and plan your spending habits for that week or day. For example, if you are planning an outing with the grandkids, decide beforehand what you want to do, where you want to go, and how much you are willing to spend. You can then review that decision measured against your monthly budget and decide whether it is affordable or not. If you see that it is not, you still have time and the option to do something else or to pick a more affordable activity with the grandkids.
Breaking up your budgeting and planning for the month into weeks and weekends will allow you to plan each week and each weekend well ahead of time, giving you the comfort and peace of mind that what you have planned is within your financial reach. This will allow you the freedom to enjoy the precious moments that matter most, instead of worrying about your financial concerns. After all, quality time is really the most precious thing in life.
For more insights on spending your money wisely and effective budgeting, Finbond Mutual Bank has recently released its latest version of the book Spend Wisely, i.e. Your guide to budgeting in times of crisis by consumer activist and financial expert Ina Wilken. To get your free copy today, please contact us at 012 460 1438.
