Statistics indicate South Africans aren’t great when it comes to saving money. Are you guilty? Here are six simple ways to challenge yourself to be better when it comes to your finances
At the end of 2020, fintech platform PayCurve did a survey of South Africans on spending and money management. The results of this were revealing. Data shows that 80% of citizens take out loans to ensure monthly financial obligations are met. 84% of people admitted that they run out of money before payday. Naturally, this doesn’t leave much, if anything, to save. We know, however, that stashing away cash is crucial not just to achieve smaller, short-term goals but to cover large costs and allow us to retire comfortably one day. Fortunately, anyone can become better with money. Here are six simple ways to challenge yourself to save more and make it a habit.
1. Set measurable goals
One of the main reasons that people give up on their personal and financial goals is that they were too ambitious to begin with. Instead of setting your sights unrealistically high or having one mega-goal, break it down into smaller, more attainable ones. This allows you to track your savings progress and feel more frequent bursts of accomplishment. The S.M.A.R.T. method is effective in helping you do this. The acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound, which are five questions you should ask yourself when setting your financial goals.
2. Make saving automatic
Sure, technology comes with plenty of downsides, but it can be your best friend when it comes to streamlining the saving process. With apps and online banking, you can set up automated payments that go directly into your savings on specific days. Because it’s important to always pay yourself first! Other than a conventional savings account that can often be too easily accessed, you can also explore tax-free accounts, fixed-term accounts as well as unit trusts as a way of stashing away cash.
3. Make lists (and stick to them!)
Making lists isn’t just a great way to remember what you need when you hit the shops and your memory lapses. One study revealed that shoppers using a list made fewer unplanned purchases. A further two studies indicated that this works when it comes to online shopping, too. Another way that lists can help to improve the shopping experience is to make it quicker and more efficient. This means less time at the mall doing household admin and more time for you. Yes, please!
4. Conduct a monthly money audit
While you are still trying to form good money habits, you’ll need to check in more regularly to ensure that you are on the right path. Schedule a monthly meeting with yourself to go through your budget spreadsheet. Examine your incoming and outgoing costs to assess where and how you need to tighten your belt to achieve your financial goals. As saving becomes more automatic, you can start having these solo meetings less frequently, checking up on your cash flow once a quarter or after any big expenses or earnings.
5. Create rules to curb spending
It takes time for actions to become habits. Help yourself to make better choices by making it more difficult to make reckless ones. This is where having rules in place can be a huge help. One of them is called the 72-Hour Rule. It applies to online shopping and requires that you wait at least 72 hours before making the decision to buy something that is in your cart. If you still want it after sleeping on it a few times, then make the purchase. You might just change your mind while you’re waiting.
6. Consume money-related media regularly
It can be difficult to stay on the right path when you are trying to become better with money, and sometimes a little motivation is necessary. Luckily, there is tons of easy-to-digest info out there in several different formats. And no, it’s not all boring, either. Financial books and articles, podcasts and blogs can make confusing concepts easier to understand by breaking them down and presenting them in ways that are interesting, engaging and relatable. Set aside time to consume some each week to keep your cash flow top of mind.
Words by Helen Wallace
