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5 Ways To Stretch Your Salary To The Next Pay Day

5 Ways To Stretch Your Salary To The Next Pay Day

Posted In: Money Talk

Approximately 56% of middle income consumers in South Africa spend all their monthly income in five days or less after receiving it. Here’s how to stretch your money further into the month

For many consumers it’s not only a matter of living from one salary payment to another, the reality is that your monthly salary just doesn’t last for 30 days.  If you are among the 56% of people who struggle with money management, saving your money, especially for emergencies is the last thing on your mind.  High spending and limited savings can cause you to rely on credit to get through the month, making you more vulnerable to be caught in a debt trap. With the rising cost of living it all boils down to financial discipline. Here are five suggested ways to stretch your money:

  • Bank efficiently by adopting adequate transactional behaviour. For instance, printing bank statements, skipping debit orders and making regular or large cash withdrawals adds to your bank fees. Instead, check your statements on a banking app or online, stick to recommended free withdrawal limits or withdraw at a point of sale at a fraction of the cost while making purchases.
  • Maximise free programmes such as eBucks Rewards, which rewards you for swiping your FNB Credit or Cheque card when making purchases and can save you up to 40%. These savings could help you to stretch every rand and minimise the possibility of unnecessarily incurring debt for consumption.
  • Use the right credit and avoid expensive credit with no long-term value.  The correct use of credit includes using the right credit for the right purpose.  Relatively cheaper credit such as an overdraft or a credit card is useful for short-term purchases while a personal loan may be adequate for home renovations which can generate future value.
  • Fewer credit installments will help you manage your debt obligations more efficiently and free up money for savingsFor instance, if you have multiple personal loans from multiple providers, you need to consider loan consolidation to help you repay a single installment which is more manageable and often affordable than different installments.
  • Synchronise your savings to your salary date and schedule an automatic transfer to a cash investment account on the day or day after your salary gets paid into your transactional account.  This removes the temptation of spending the money if it was still available in your day-to-day account.
  • Building up savings that you can access in case of emergencies is crucial, hence it’s important to prioritise an emergency savings account which can act as a buffer or safety net to help you avoid the need to take out additional credit to pay for unforeseen expenses.

Words: Raj Makanjee, CEO of FNB Retail

Source: FNB

Image: Kefilwe Mabote

 

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