The ability to manage money efficiently is crucial. This is more so now, as South Africans try to adapt to these challenging times and having to stretch their money to survive.
As the country continues to observe the national lockdown and now eased to level four, it is an opportune time for consumers to check that their money affairs and financial plans are in order.
Programme head at First National Bank (FNB) Money Management, Ester Ochse said, “Amidst all the uncertainty and financial pressures consumers are facing, one could also view the national lockdown period as an ideal time to review and go through their finances to ensure that they’re not only in the right standing but that they’re also still on track in keeping to their financial goals.”
There are four major financial principles we tend to cast a blind eye or even procrastinate to look at.
Ochse provided key points to consider when using this time to conduct a Lockdown Money Review:
- Take stock of what’s important to you and how you align your spending
It is important to clearly outline what you need versus what you want. For those with a partner, it will be great for both of you but first, do this exercise by yourself and then agree to what this picture looks like for you together.
- Prioritise – what is of value to you.
Decide which of the wants you deem as most important and valuable. Thereafter, start directing your money towards them and fulfil. Most of us have a limited amount of money so it’s crucial to first choose the ones that are most important to you. Predominately, the ones that will set you up for financial wellness in the longer term.
- Trade-off and action – how much of what you spend every month is going to your value list.
Once you have done the two above, you then have to align and direct the money you spend to cater to the things you have listed. Going through your bank statements will assist you greatly to give you full sight of your spending and mark opportunities to eliminate overspending.
- Review and repeat – making it a habit.
To make this a habit, it can’t be a once-off ‘lockdown’ exercise. Set a time in your calendar to review this and going through the above steps on a quarterly basis. Values change over time and you have to check-in with yourself and adjust where needed.
“The lockdown continues to be a great opportunity to develop good financial habits. Implementing these simple changes in your financial behaviour could give you the necessary room to save for a better life,” Ochse concluded.