We are navigating murky waters at the moment with an ever-increasingly ailing economy. Inflation has been rising, eroding the little value of the RTGS$ based incomes that most people earn. Standards of living are seriously compromised for most and poverty levels have significantly surged. If budgeting was something alien to you then you might want to consider taking a go at that, especially now. I know financial management is now a perplexing undertaking; but, it can still be done. In this article, I’m presenting to you 7 practical tips to effectively budget your finances given the ailing economy.
This must be the launch pad and must be repeated continuously. Being intense, objective and uncompromisingly honest with oneself. You must undergo an exercise where you take a snapshot of your current financial state and then closely examine it. Take it apart and leave no stone unturned in trying to identify problem areas that need some changes. Do these diagnostics processes regularly to ensure you know the direction and the courses of action to take.
Review Fixed Expenses
Reviewing your fixed expenses can help you note possible mitigatory measures for financial inadequacies. A high rentals charge can necessitate relocating to a less expensive place. High fuel costs and vehicle maintenance costs can imply that maybe you should use alternative transport that would be cheaper. Spikes in boarding expenses can mean it might be better to send your kids to day schools. The idea is that you want to unlock or redirect some of your money that is tied into present unsustainable lifestyles. People can be creatures of habit, implying they tend to stick with ways of doing things they have been accustomed to for a while. The pain of a new idea or new approach can be very unsettling for many. Regardless, you must take a discerning look at your fixed expenses and make painful but rewarding decisions.
Dispose of Liabilities And Some Assets
I find it amazing that many people hold onto liabilities and some expendable assets yet they are struggling financially. You can find someone with countless pairs of shoes or sets of clothes they barely even use. An interesting example is people who have multiple stands yet some are just lying idle, undeveloped – yet some people are more than ready to buy a stand. In some developed countries yard sales are a common occurrence which is almost unknown this side. Many people have astounding amounts of money locked up in rarely used possessions at home (some liabilities and some assets). Currently, many people can’t even fully live off their incomes and so possible means of unlocking more income are desirable. Take stock of the things you own and see what you can dispose to earn money. This is money that can end up being used for debt clearance, savings or investments.
Preserve Your Savings In Forex
I know it’s not business as usual and the times are tough; saving is still important. Whilst you’re at it ensure you preserve your savings. The best way to do this is to convert your savings into US Dollars or Rands. You cannot afford a scenario where your savings are eroded whilst sitting idle. Suppose you were saving up for your child’s school fees in bond before the scrapping of the 1:1 parity. This would mean by the time the parity was removed your savings’ value would have been eroded altogether. Had you converted to USD and saved in that currency the value would have been preserved.
This concept is the inspiration behind things like money clubs (a.k.a mukando) and beef committees, for instance. This gives you the convenience and reduced burden of having to contribute lower and manageable money yet reaping huge rewards. Some do this in sourcing groceries e.g. pooling resources as a team to facilitate the travelling and logistics of one to go source groceries in, say, South Africa or Botswana.
Forego Some Pleasures
You probably love to go on outings or spending sprees as you pursue your pleasures. As good as they this might be you may have to forego some of those things nowadays. Leisure and entertainment are good, don’t get wrong – but you don’t always have to spend money to do these things. There are many creative, cost-effective or even free ways in which you have fun and enjoy. The goal right now should be to prioritize things upon which your literal survival is hinged. Don’t bankrupt your sustainable living by focusing on fleeting pleasures.
Diligently Compare Prices
Some have always been religious about ensuring they exhaust all pricing options before they make any purchase. This sounds laborious and at times even primitive to some. However, there are many times people have made quick purchases only to realize later the same day that the same item costs significantly less somewhere else. So as you endeavour to save money and spend less by all means possible, consider diligently comparing prices before making purchases.
These are very simple and straightforward tips that you can put to work immediately.