Five pro tips to put you more in control of your finances

While most people tend to worry about money from time to time, there are five key indicators that you may not have a tight enough handle on your finances:

I don’t know where my money is going

Online shopping and services enable spending but make it more difficult to keep track of expenditure. In particular, online subscriptions tend to accumulate over time and, if left unchecked, can become unmanageable.

Tip: Print out last month’s bank statement and highlight all debit orders and subscriptions that appear. If you haven’t used a service in the past three months, it may be time to reconsider its purpose in your life.

I am spending more than I earn

Once again, online shopping and an accumulation of subscriptions can contribute to overspending and this, in turn, can result in increased debt.

The only thing more dangerous than spending more than you earn is not knowing that you are doing so.

Tip: Download a budgeting app and start keeping track of your expenses. Be ruthless about cutting out nonessential expenses such as takeaway meals and other luxuries you can’t afford.

I have too much debt

Spending more than you earn over a prolonged period will result in heavy indebtedness and increased financial stress. Attacking debt deliberately and strategically to reverse the downward spiral of indebtedness is the first step towards financial freedom.

Tip: Download a debt reduction calculator and input all your debt. Taking your earnings into account, the calculator will generate a workable debt reduction plan.

I have no emergency funding

Without an emergency fund, you are one eventuality away from a financial crisis. A seized car engine, a burst geyser or a dying fridge are all incredibly expensive catastrophes that, without access to immediate cash, can set you back financially.

Tip: Emergency funds must be accessible same-day. If you don’t have any emergency cash in place, set up a simple savings account into which you deposit a small amount of money each month and continue to do so until you have built up an amount equivalent to about three-times your monthly income.

I worry about the cost of healthcare

The reality is that we all need to insure the cost of private healthcare and in-hospital treatment. Without a comprehensive hospital plan, very few people could ever afford the cost of hospitalisation, surgeons, specialists and anaesthetists.

Those who do not have medical aid cover are wholly dependent on state medical facilities.

Tip: Many open medical schemes provide very affordable hospital plans that provide excellent private healthcare in a network of clinics throughout South Africa. If affordability is an issue, a network hospital plan is worth investigating.

If there’s an area of your finances that is causing concern, it is likely that a lack of control exists. By taking control of one’s finances, we can harness the magic of compound interest, grow our personal wealth and employ what we have in the service of bettering the world around us.

Eric Jordaan is a director at Crue Invest

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