They say that money is the root of all evil. It may or may not be true but what is true is that a lack of money or the desire for more can lead you into trouble. They also say that the best things in life are free. But this is really only idealistic talk, and it refers to things like the air we breathe and the company of our close friends and family.
But you don’t have to have boatloads of money in order to be happy. Just getting by; being able to afford the basics and have the occasional treat, and if you’re lucky or smart enough to control your finances and have a little left over to put aside for that rainy day; is enough for the majority of people. It’s only a matter of juggling.
There are lots of simple things you can do to save money an article entitled 101 savings tips, on the Fin24 website, can point you in the right direction.
Money management made simple
Managing your finances is not all the difficult to achieve. Most people can do it if they set their mind to it. But what it does need at its roots, is a good understanding of money and how you can manipulate your finances to your best advantage, not just for now, but for the future too.
When it comes down to the basics, managing your money supply is all about balancing your spending against your income. The most important tool you can use towards this end is creating a budget.
Creating a budget does not manage your finances, but what it does do is to show you how much you are spending, and what you are spending it on. There are some things that are unavoidable. For example, you need to buy groceries, and you need to pay your utility bills.
Keep a careful eye on impulse buying
The things that usually catch you out, and it can be surprising as to how much you spend on them, are things like entertainment (going to the movies, going bowling, going out for drinks etc.), eating out, and impulse purchases.
Once you can see how much you spend in these areas, you can if you need to, cut back. Budgeting is merely a way of helping you put yourself in the driving seat.
Your ultimate aim when it comes to managing your own money affairs is to be able to create enough disposable income to put into some sort of savings vehicle. This is where too many South Africans fall down. If they have disposable income left over after the essentials have been taken care of, they fritter it away on frivolous things. It’s a big mistake.
Preparing for the unexpected
Somewhere along the line, a totally unexpected bill is going to crop up. It might, for example, be your car breaking down and needing an expensive repair. It could be that you receive a tax bill out of the blue. It could be anything. But if you don’t have any money put by, and the expense is a large one, you are going to find yourself in trouble.
If you do get into financial difficulty, it can be tricky to work your way back out. Carving a big hole through your available money supply means having to try and fill that hole, and when you have a limited income, that can be a difficult thing to do.
Loans can be useful tools
You may have to take out a loan in order to get your cash flow back into shape. There’s nothing wrong with taking out a short-term loan just as long as you are sure you can afford the repayments. Loans of this nature are just another tool in the money managers toolbox and used in the right way; they can be a very useful stop-gap.