The year 2020 was a tough year and economists predict that 2021 will not be any easier. The majority of us were impacted in one way or another. Individuals lost their jobs, households experienced a reduction in income, businesses closed down and the economy had a big knock. Certainly a hard-hitting reality that caused enormous financial stress. The best we can do is to remain positive, grab new opportunities and make the most of what we have. 

Using a budget effectively to manage your financial situation will provide you with a strong foundation to improve on your financial wellbeing. Here are a few tips:

  • Write your budget down, use an excel spreadsheet or use an app / system, but don’t keep your budget in your head only.
  • Include all your income sources (salary, commission, business income, rental income, investment income etc.) as well as all your expenses. That will help you to determine whether you spend more than what you earn.
  • Budget for savings even if you can only put aside a small amount every month.
  • Firstly include your ‘cannot-live-without’ expenses for example groceries, accommodation, transport, water-and-electricity etc. It is not possible to cut these expenses completely but try to see if you can generate savings on these expenses. Maybe look out for specials on groceries, buy from a cheaper supermarket, buy in bulk, implement a timer for your geyser, start a lift club to transport the children to school and activities etc.
  • Thereafter include the ‘nice-to-have’ expenses; those expenses that you actually can live without for example entertainment, clothes, beauty treatments, DSTV etc. Only include these expenses based on what and how much your budget allows.
  • Also take into account those small expenses that quickly add up over time. That take-away cup of coffee when you wait at the petrol station, buying that magazine at the till point and parking fees at malls. Try to reduce those expenses as far as possible.
  • Don’t forget to include inflation and annual increases when you compile your budget especially on items like medical aid and insurance that can have rather big annual increases.
  • It is also important to budget for once-off expenses like children parties, renewal of driving licences, school uniforms and stationary.

Wishing you a prosperous and blessed 2021. May you achieve financial success personally and within your business regardless how difficult the circumstances might be. Be money wise during 2021!

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