This month South Africans experienced a significant fuel price hike, and a major fuel price increase is also on the cards for July.
These factors, coupled with rising food prices and the South African Reserve Bank raising interest rates, indicates that South Africans will face tough financial times - and will be looking for ways to save money.
An important step to take towards saving your money and stretching your finances is to create a budget plan. A budget will help you to plan, organise, track, and improve your financial situation.
We tracked down some expert advice to help you start your budgeting journey. Here, according to the experts, are the top 5 things you should be doing:
1. Figure out your net income
The first step to creating a budget is knowing how much money is coming in. Work out the net income (ie after income tax has been deducted) of everyone that contributes to your household, including spouses, parents and children.
2. Create a list of your expenses
Your expenses can be divided into two lists: fixed costs and discretionary costs and savings.
This can be broken down into:
- Fixed costs: rent/bond, car payment, school fees, insurance, levies and bank fees.
- Discretionary costs: entertainment, clothing, toiletries, transport, data and fuel.
- Savings: money that you are putting aside towards a savings goal.
3. Save for the unexpected
While drawing up your budget make sure that you create space for unexpected costs. Putting aside some money for a rainy day is a better option than going into debt when an emergency comes along and you need extra cash.
This is important step that will allow you to make informed decisions in your budget plan. Know what you can spend your money on this month, and save towards the other things so you can purchase them next month.
5. Set goals
Having budget goals will allow you to be committed when you have something to work towards. Your goals could be saving for a family trip or buying an expensive set of headphones for a birthday. Write goals down and keep revisiting them.