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Spring is the season for new beginnings and fresh perspectives, but it is not only your home that needs a spring clean. It is also the perfect time to reassess your finances, clear out the clutter and get all your financial affairs in order before the year ends.
Research conducted by Sanlam found that over 80% of South Africans experience stress when managing their personal finances, while only 35% of South Africans have faith in their abilities to manage their money, with just 17% feeling content about their current financial situation.
Mariné van Brakel, deputy CEO at RCS, says many South Africans relate to needing a financial spring clean, not just to make their money work harder but to build the confidence to make smarter financial choices.
“The best part is that it does not have to be an overwhelming cleaning process. By focusing on a few key aspects of your spending and money management, you can refresh your financial situation and set yourself up for a more secure future and less unnecessary stress.”
She recommends checking in on five areas: your budget, your credit health, your safeguards against fraud, consolidating your debts and updating your financial literacy.
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No matter where you are in your financial journey, a solid budget is the foundation of smart money management, Van Brakel says. “That is why your first step in a financial spring clean should be reviewing your monthly budget.
“Start by reflecting on the first eight months of the year: where did your money go, have you saved regularly, are you living within your means and has your income changed? Armed with these insights, you will be able to make informed choices, whether it is cutting unnecessary expenses, automating savings, or adjusting your financial goals to be more realistic and achievable.”
When last did you check your credit score? Now is the perfect opportunity to do just that, Van Brakel says. Keeping track of your credit score will help you to ensure that you are servicing your debt diligently, using credit responsibly and catching any errors early on.
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Too many South Africans are falling prey to the tactics financial fraudsters use to rob people of their hard-earned money and therefore, freshening up your knowledge on how to avoid fraudulent scams is important. Remember to always do these three important checks:
When you spring clean, it is also a good time to declutter and the best way to do that is by consolidating your accounts. If you have multiple credit accounts for clothing, groceries, luxury items or electronics for example, you could save on account and transaction fees by getting an account that provides access to many different outlets using one credit facility.
Van Brakel says it is also important to ensure you understand the fees associated with your accounts and learn how to avoid unnecessary charges, such as late payment penalties or collections fees, by ensuring your instalments are paid on time.
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The final pitstop is to brush up on your financial literacy, Van Brakel says. “Do not rely on your spouse, partner, family member or the auntie next door for the information you need to make good financial decisions.
“Empower yourself by investing in your financial education. Enrol in a free financial management course, attend a workshop, reach out to an advisor or make a point of conducting online research on the topics you need to learn more about. When it comes to money matters, knowledge really is power.”
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