Now is the time to spring clean your finances
Springtime offers you a fresh opportunity to review your finances and let Old Mutual Rewards help you reach your goals.
For most South Africans the beginning of 2020 was an opportunity to set new financial resolutions. Absolutely nobody could have predicted what the year actually had in store. “There is a season for everything,” the saying goes – so why not use the season of renewal to revive your aspirations, clean up your finances and chart a new course of action.
“The idea of spring is a great metaphor for a fresh start,” says Brett Cameron, Head of Old Mutual Rewards, who believes the secret to achieving your goals is understanding that success is a series of small steps. “Too often, we set fluffy, vague goals without thinking through the steps we need to take to achieve them,” he says.
Cameron also believes that dreams are powerful. “Having a dream can be a great motivator and help you make smart financial decisions to help achieve it.”
There is no denying that South Africans across the board have had a tough year. But in life every crisis is an opportunity to build back better, so make sure you set time aside to take stock and learn from past mistakes and setbacks. Base your new plans and money goals on the reality of where you find yourself.
Budgeting and sticking to a plan can be daunting, especially when your finances are not in great shape. Cameron offers clear pointers on how to make a fresh start this spring.
Learn good habits
Learn good money habits through Old Mutual Rewards, a fully digital rewards programme that South Africans can join for free. By completing the Rewards budgeting assessment, you’ll be developing a highly effective new money habit PLUS earn 20 points.
Draw up a realistic budget
Use the 22seven app to draw up a realistic budget using the 50:30:20 principle as a guide (also for 20 points). Members can easily link this money management app to their Old Mutual Rewards profile and earn points monthly for activities you complete on the app.
The budgeting ratio advises that you spend 50% of your income after tax on fixed essential costs such as rent/home loans well as food, transport and household essentials.
This means you can allocate 30% to financial priorities — such as savings, retirement and insurance cover — and repaying debt. Enjoy the remaining 20% on lifestyle needs, although in this tough climate you may need to consider slashing that from 20% to 10% or less.
“Having a benchmark to work against means that members can be more objective in how they allocate their spending. Perhaps there is an opportunity to challenge yourself to align your spending with the guide,” explains Cameron.
When it comes to lifestyle needs, ie entertainment and leisure, Old Mutual Rewards membership benefits are particularly useful, as you can spend your points with a number of partners. Use it to eat out at a PRIMI restaurant, or enjoy a meal at Nu or Kauai, among others. Alternatively, enjoy a meal at home with the help of UberEats , book a treatment at Sorbet or access Xbox, PlayStation or Steam benefits.
“By using rewards points towards entertainment expenses, members can put the money they save to smart use by paying off debt or boosting an emergency fund,” Cameron says.
For a more personalised view of your spending he recommends you download the 22seven app.
Set realistic financial goals
Once you have a clear picture of how your finances look, you can set new goals or adjust your existing ones, taking into account your budget. Cameron says this may require extending the deadline you set yourself earlier this year.
If you’re a member of Old Mutual Rewards you can improve your financial understanding by completing free Moneyversity courses on the platform — and earn up to 750 points for doing it.
Topics include Surviving on what you have: Budgeting 101, Financial tips and Securing a bright future: Financial planning and Keeping some money for yourself: Credit and debt.
“Don’t be discouraged by the setbacks of 2020. Use this new season to learn and build back better. Simply by planning ahead and being disciplined, you will make real progress towards achieving your goals,” Cameron says.