Tips for better financial management
JOBURG - A recent World Bank survey named South Africa the world’s most indebted society with 10.26 million citizens having accounts that are three months in arrears.
A recent World Bank survey named South Africa as the world’s most indebted society, with 10.26 million citizens having accounts that are three months in arrears.
This was said by Direct Axis, a financial advisory company, during Youth Month to help educate young people that indebtedness starts with irresponsible spending behaviour. The company also said a Student Village online survey found that students don’t care about saving or investing, only spending money now.
The company said the situation was getting worse, with spending on the rise –even when 86 percent of the students relied on parents and family for income. They spent what they were given, sometimes even more than employed people every month, with male students outspending their female counterparts.
The company said it wasn’t all doom and gloom though, as most students wanted to learn to manage their finances better, with 61 percent saying they wanted to know how to save, and 54 percent keen to find out how to budget.
Gavin Moir of Direct Axis, advised students to celebrate the month as a starting point to better financial management of their resources.
“If you spent National Youth Day hanging out with your friends, wasting money on things you don’t really need, perhaps it’s time to do something constructive and empowering to fix your finances,” he said.
“Running out of money every month, constantly being broke and struggling to pay for even basic expenses isn’t cool or clever. When this happens you aren’t in control of your life, but a slave to your poor financial planning and you’d better do something before living beyond your means becomes a habit.”
Moir suggests three steps for taking control of one’s finances:
Build a budget: You need to know all your income sources and how you spend the money. Spending should not exceed income.
Cut your costs: Non-essential costs like entertainment are the best place to start. Instead of eating out twice a week or ordering pizza, you will reduce spending by cooking at home. If you go out with your friends, set a budget. Once you’ve spent it, go home. Also get rid of short-term debt through store cards which attract high interest rates.
Set yourself up: When you get your spending under control, try to save between 10 and 15 percent of your monthly income. Government rewards this by allowing one to save up to R30 000 a year tax free.
Details: Meropa Communications 073 520 4684; 021 683 6474.
