Know the difference between needs and wants so you can manage your money properly

People need to know the difference between a need and a want so they can practice good money management. Picture: File

People need to know the difference between a need and a want so they can practice good money management. Picture: File

Published Feb 15, 2024


South Africans are facing tough financial times as they struggle with high interest rates, increases in food costs and rising fuel prices.

Due to these factors, consumers are forced to take a closer look at how they spend their spend their money. Knowing the difference between a need and a want can help consumers stay on the right financial track.

According to Farzana Botha, Segment Solutions Manager at Sanlam Savings, a need refers to something essential such as your home or groceries for you and your family while a want is a nice-to-have like daily cappuccino from a coffee shop or a takeaway lunch at work.

Now that you know difference between a need and a want, here are five tips to help you manage your money.

Plan your week

People should plan their week by looking at their activities for the week, such as shopping for the household or travelling to the office. Some retail stores will have discounts on certain days, which people should take note of so they can save money.

By taking these measures, you will manage your time properly, and you can also start saving.

Check your budget

Go through your weekly or monthly budget and identify how much you can afford, and how much you can save based on your budget. There are tools available online such as budget templates that can help people create their own budgets. People can also download apps to help them budget.

According to Tyrone Lowther, head of Budget Insurance, if people are trying to get out of debt or even save money, a basic budget can them gain control of their finances

Get help

If you are unsure where to start, ask a trusted friend, a family member, or even a financial adviser about how you can start getting your finances back on track.

Claire Klassen, a Consumer Financial Education Specialist at Momentum Metropolitan said that a financial adviser will guide you when you are struggling to make decisions or stop you from making poor ones, to ensure that your finances remain in order during stressful times.

You can also make use of the many online money management tools. You should also check with your bank to see if they have useful hints and tips on their websites you can refer to.

Start saving

You can save your spare change in a glass jar or box and use that money towards a short-term savings goal like a new set of headphones.

Then, at the end of every month, every three months or at the end of the year, depending on your preference, open your savings box or jar to see how much you have saved.

People can also put away money in a savings account for long-term savings goals like a new car or a new house.

Track your money

It is difficult to manage your money without keeping records to help track income and spending. These records should include receipts, payments, and financial statements.

You should set up a system for dealing with accounts and statements, and make sure you have a different system for sorting and organising receipts and paperwork.

Identity fraud is on the rise, so you should tear up or shred unwanted financial correspondence instead of just throwing it in the trash.

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