Managing expenses regularly is the best way to avoid debt and build savings that can accommodate planned and unplanned big purchases. Here are four ways to manage your finances:
- Review your budget: when working on your budget for the current month, compare it with last month’s budget and identify items that you no longer need. This will help you cut unnecessary expenses and create room for you to bolster your savings or pay extra on your bond or car, for example.
- Set financial goals: one of the best ways to manage your finances and reducing expenses is to set financial goals. Making financial commitments such as cutting debt, saving for a big purchase items such as a house or a car can help you alleviate unnecessary expenses because you will be constantly be reminded about what you want to achieve.
- Avoid impulse buying: unplanned purchases can add up to a lot of money at the end of the month and in most cases they are the common cause to why people run out of money before pay day. If you find yourself in situation whereby you want to make an impulse purchase, ask yourself if you really need to make the purchase.
- Pay extra on your debt: making extra payments on your debt will help you save on interest and further pay off your debt earlier. In the case whereby there is a decrease in interest rates, it is advisable to continue paying the same amount towards the debt repayment which will further help you save more on interest and reduce your repayment term.
Have you found ways to better handle your money this year? Please share in the comments below
Words: Ester Ochse, Product Specialist at FNB Financial Advisory
