25 million people in South Africa are in debt. Addressing this will require a rethink of how we manage our money, how we approach budgeting, lifestyle choices and even how we bank.
If we want our money to last longer in the month, it’s wise to start budgeting, which 37% of us stick to, the majority being women aged between 25 and 45 (80%) who earn less than R10,000 a month (42%).
However 36% of us use a loose mental budget – typically those of us who earn more than R10,000 a month – and 19% of us draw up a budgeting plan and don’t stick to it. 5% of us only realise that we’ve run out of money when our card is declined.
How do you manage your personal finances?
The experts advise us to put away smaller amounts more regularly. “Typically when you ask someone how much they want to save, they’ll say, for instance, R3,000. Few say they’ll start with R50 and incrementally increase that amount. This is because everyone has dreams but most people don’t know how to break these down into achievable goals. People battle to get their heads around the first step,” says Gerald Mwandiambira, author of “My Money, Chelete Yaka, My Geld, Imali Yami”.
“Add to this the power of saving smaller, incremental amounts throughout the month, and earning interest and compound interest on our savings, we do have the ability to turn our financial situations around. It requires a rethink of how we spend our hard earned cash, at times a step-change in lifestyle choices and even about how we bank, but it can be done,” adds Tauriq Keraan, TymeBank CEO. “There is a lot of information available for people to help themselves – websites, books, programmes on TV etc. But we need to make a conscious decision to educate ourselves to help us take back control of our finances.”
We know that many South Africans struggle to save, but once we take control of our money management, we can work towards our goals and reach our full potential.
How to budget better
For those that can, start small. Saving just 5% of your income is a step in the right direction.
Have dreams and choose a bank that backs you. We all aspire to be better. We want to buy that house, get our own car or learn that skill, but it all begins by committing to our financial future, and taking back control of our personal finances.
Be open to learning. With the right tools and knowledge, we can move from financial anxiety to financial freedom. There are loads of free online blogs that share tips and advice on how to manage a cash budget, like this one for example.
Making and sticking to a personal budget sounds like a lot of hard work. But budgeting can save you more money, which in turn can earn more money for you in the form of interest. Like saving with GoalSave from TymeBank. GoalSave is a powerful savings tool that offers you one of the best interest rates in Mzansi. Start your GoalSave now.
Source: Study conducted by World Wide Worx (WWW) in collaboration with Ratepop, a real-time consumer insights platform, targeting a nationally representative population sample of 100,000 people in 2018 and 50,000 people in 2019.