Have you ever gotten halfway through the month and wondered where all your hard-earned money went? Many of us end up in this situation on a regular basis, so you’re certainly not alone. Even if you make a decent amount of money, and avoid luxury expenses, it’s still possible to overspend before pay day.
In a survey commissioned by TymeBank in 2019, it was revealed that many South Africans actually have a monthly budget in place. Nevertheless, 76% of them still run out of money before the end of the month. If you constantly find yourself going through this cycle, here are the key reasons for having a budget and pulling yourself out the dark hole.
You’re probably aware of your monthly bills and the debit orders on your bank account, but do you know exactly where your money is going? Most people are surprised at how much money they spend on take-away food, clothes, or a few drinks at the bar. It all adds up after a few days of mindlessly swiping your card and ignoring the SMS notifications.
Bearing this in mind, it’s advisable to check your bank statements as often as possible and keep an accurate record of income and expenses. A budget will hold you accountable and make sure you don’t overspend on unnecessary products and services.
With a detailed budget in place, you’ll have the relevant information to prioritise certain expenses. You can focus on people, events and items that are most important to you in the long run. For example, if you’re going on a holiday in 3 months, you might want to cut down on the number of cappuccinos you buy at the work canteen. This means you’ll have more money to spend while on holiday.
As reported by an Old Mutual research project, entertainment and take-away food expenses are among the first to get cut when South Africans need to save. This means using a budget to set financial goals and prioritise specific expenses is highly beneficial. At the end of the day, a goal without action is just a dream.
In order to create a realistic budget, it takes a bit of time and effort. However, it’s definitely worth it. Remember that the lifestyle you have today will determine your future. A budget doesn’t mean you can’t have fun and spoil yourself on occasion. However, it helps you come to terms with how much money you have and the kind of purchases that are realistic.
For example, if you’re budget only allows for R9 000 per month in rent, you’ll realise how far-fetched it is to seek out a 4-bedroom house with a garden.
Above all else, you can overcome budgeting challenges by consulting a lifestyle financial planner. They have the ability to create a personalised life plan just for you and show you exactly how to implement it. In addition, the plan will help you discover what’s important to you and achieve both personal and financial goals. It’s a lifetime gift to yourself that you won’t regret.