How To Improve Your Finances

Money worries are one of the main contributors to stress and problems in marriage and families. But it doesn’t have to be like that, even if you earn a minimum wage. Sometimes the solution is as easy as simply changing your mindset. Here are six ways your attitude towards money can improve your finances and your life:

Knowledge Is Power
“People fear what they don’t understand,” says Andy Gilder, general manager of South African financial advice website justmoney.co.za. “To take control of your financial well-being you need to make sure you understand every aspect of where your money goes and where it comes from. Don’t be afraid to ask questions and get information from banks and insurance or investment salesman before you make financial decisions. No matter what you earn, there is someone who can help you manage your money and improve your finances.

Budget Your Money
Take your final income after deductions (e.g. tax) and measure it against your absolute minimum necessities. Keep track of these on a simple spreadsheet. Budget your money for expenses like rent, bond, food, clothing, electricity, water, rates etc. Paying off credit card debt and looking at options to decrease your monthly banking fees are also important for improving your finances.

Don’t Buy What You Don’t Need
Many people struggle to determine what they need and what they want. “Most individuals do not know the difference and find themselves planning for nice-to-haves – and neglecting the must-haves,” agrees Elizabeth Lwanga-Nanziri of the South African Savings Institute. The answer, she says, is to always budget your money and live economically. And remember to always shop around for the best deal.

Consider Your Lifestyle Choices
Think about how your lifestyle choices affect your available money. Example: drinking and smoking are wants and not needs. One pack of smokes a day costs around R20. Over a year that is R7 200! That is a big saving that could greatly improve your finances or be a big contribution to your children’s future education.

Remember You Can Treat Yourself Occasionally
Treat luxuries as wants and not needs, but reward yourself occasionally. This could be as simple as a nice restaurant meal at the end of the month, a party with some friends, or a big screen TV at the end of the year. Just make sure you save your money and can really afford it.

Spend Your Money Smartly

• Always bear in mind that paying upfront for items like public transport or school fees usually decreases their costs.
• Always pay towards your debt before buying a new pair of shoes!
• Pay your bills on time so you aren’t charged interest.
• Have a plan – it will make it much easier to reach your financial goals.

Learning to budget your money and manage your money efficiently is the best way to improve your finances. While the tools for improving your finances are always readily available to you at banks and other financial services, changing your mindset towards money is the first step. Planning how you’re going to spend your money and sticking to that plan will go a long way in improving your finances and your quality of life.