2 February 2022
min read


The early payment of December salaries and festive season overspend often result in starting the year with tight funds. To get your finances back on track read about our simple, and effective budgeting techniques.

Creating and managing a spending plan is a lifelong skill that empowers you to achieve financial freedom. It is an effective tool to reduce financial stress and achieve goals, whether to cut debt, save for a holiday, or trim expenses. There are some simple tools you can use to get started or improve your budgeting process.

Reduce the admin: Making budgeting easy! Integrated budgeting apps remove the admin pressure from budgeting, they track your finances and allocate it to categories, so you don’t have to. You can have your bank's budgeting app working for you in minutes.

Plan and understand: To effectively budget you first need to understand your income and how you spend it. Set aside time to review your finances, group them into Income (The money you receive), Expenses (Where you spend your money), and Savings (How you’re looking after your future). Further breakdown your expense into Wants (Including takeout’s, entertainment, gifts, etc.) and Needs (including your costs relating to your home, food, transport, school fees, etc.)

Set Goals: As a starting point, the budgeting rule of thumb is to spend 50% for needs, 30% for wants, and 20% for savings and paying off debt. Remember to include goals such as saving for a family holiday or for a deposit on a new house. Contributions to these goals can form part of your wants and help you increase your savings self-discipline.

Start saving now: The sooner you save the better! Set up a direct deposit to save automatically so that you save before you spend. For compound interest to work in your favour, you need time in the market. Give yourself a goal and aim to save 20% of your monthly income, once you achieve it, challenge yourself to save more (25% – 30%), you’ll thank yourself later.

Reduce impulse spending: Online shopping makes impulse spending so easy. Set up a roadblock to help slow down the decision-making process, this will help you make a clear and calm decision.  Before the purchase, ask yourself: Do I really need this item? Would I rather have this item or achieve my savings goal? Give yourself time to sleep on the decision. If you decide to proceed with the purchase, see if you can get the item second-hand or at a discount?

Track your spending: Arrange a monthly or weekly date with yourself to monitor how you are spending so you can learn to adjust your habits.

Reduce your costs: Take time annually to review your contracts and debit orders. Consider if any of them need adjustment and research if you can get the same service for cheaper rates. You’ll be surprised how often you can make savings by reviewing existing contracts.

Disclaimer: The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.


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