Buy online
Already feeling financial stress in 2024? You can take control! Follow these top tips from our experts, take charge of your finances and manage your money worries. Let’s go!
A tough start to the year
2023 wasn’t kind to your personal budget, and unfortunately, 2024 is looking much the same! Prices are still rising, interest rates remain high, and there was no tax relief in the National Budget! You can’t change the economy, but you can change how you manage your budget and take control of your finances.
First things first: get help!
If you don't know where to start and need help managing your finances and financial stress, ask for help! You don't need to shoulder all the financial burdens yourself. Help is available from:
- Your financial adviser, who can provide expert, objective advice on your finances, debt and budget.
- Your creditors, who may be willing to restructure your debt so repayments become more affordable.
- A debt counsellor, who can assess your debt and help you enter debt review if necessary. The Truth About Money also offers debt management services including telephonic debt counselling, debt consolidation and debt settlement, or you can visit the National Credit Regulator to find a registered debt counsellor in your area.
- Friends and family who can give you much needed advice and support. Take a moment to chat to them about the family finances and budget so that they understand where money can be spent – and where it can’t!
- A counsellor or psychologist, who can help you deal with financial stress and anxiety. SADAG (The South African Depression and Anxiety Group) offers free counselling services.
Advice from our experts
We asked certified financial planner Mulalo Nemataheni and wealth coach Ursula Malebo Molefe on how to navigate the economy and your finances in 2024.
Tip #1: Give yourself a break, but always have a plan
Now more than ever it is important to have a financial plan. “Be gentle with yourself,” says Mulalo. She says that money management is a journey, there will be challenges and mistakes, but always have a plan!
“At times, you get the money management journey right, but sometimes you miss a turn. What is important in this journey is for you to have goals and a financial plan that supports those goals.”
When you have a plan, you can plot your journey and make sure your road takes you to your preferred destination, even when you encounter the potholes, big and small. “Allow yourself to be flexible and go easy on yourself,” she says.
And remember, you aren’t alone on this journey, there are many South Africans on the same road, dealing with the same financial issues and stress.
Tip #2: Take charge of your budget
With budgets stretched and bank accounts emptying faster than an Olympic sprinter, it is even more important to ensure that your budget is closely managed. Every cent should be accounted for, and you may need to cut expenses or increase income at short notice.
Ursula suggests a budget “check-in” every month before you get paid so you can plan how to spend your money, followed by a “check-out” after you have been paid. This can show you if you went wrong anywhere, such as overspending on one item or underspending on another. Then, if you need to, you can revise your budget and adapt it so that it matches your income and spending, making sure you live within your means.
Also remember, as Ursula says, that budgeting requires discipline and is an exercise that can take time to get right! You need to be prepared to spend time on your budget and on learning to manage your spending!
Tip #3: Don’t cancel your life cover
When the budget doesn’t balance it is tempting to completely cut the insurance premiums and cancel your life cover. This may seem like a necessary measure to save money, but it does leave your loves ones exposed. If you passed away, could your loved ones find the funds they need to pay their living expenses?
“Cancelling your life cover is one of the worst mistakes I have seen people make,” says Ursula. Not only will you not get your premiums back, you also won’t be able to claim if the life assured passes on.
“Always make sure that your cover is affordable and is something you can keep for life,” she says.
If you are struggling to pay your life or funeral insurance premiums in 2024, talk to your financial adviser or insurer to find out how you can make premiums more affordable, such as by reducing your cover amount, which will lower your monthly premium.
Tip #4: Have a savings strategy
While you may need to be brutal and cut savings and investment contributions, it is important to try and put something aside every month.
Reduce or cut out
If you simply cannot afford to save and invest, ask your financial adviser or investment company to reduce or stop regular deductions. This will add much needed funds to your budget.
Always try to save for emergencies
However, no matter how hard times are, make saving for emergencies a financial priority! Ursula suggests that your emergency fund should ultimately be enough to cover six to 12 months living expenses. But, you can build your fund over time. Save what you can, when you can.
Save and invest for your goals
Set your savings and investment goals, such as a vacation in five years, a deposit for a new home and retirement. Then, when you have your emergency fund in place, save what you can afford towards these goals. “Save small amounts regularly. Consistency is key when it comes to savings and investments,” says Mulalo.
Saving for the things that are important to you, even if it is small amounts, gives you purpose and something to look forward to. This motivates you and gives you a much-needed boost when times are tough.
Tip #5: Use credit wisely
If you have access to credit, it is quick and easy to use these “funds” to cover any shortfalls in your budget. Avoid this if you can, because credit is expensive, and repayments can quickly become unmanageable! Before you take on any debt be sure to work out if you can afford it and what fees and interest you will pay. And, if you have debt, try to pay it off as soon as possible to save on interest and free up funds in your budget.
“Get financially literate and learn how to use credit wisely,” says Mulalo. Like many advisers and wealth coaches, Mulalo runs regular financial literacy workshops in person and online, and posts updates and financial tips on her YouTube channel.
You can also take a free financial education course such as Ditching Debt from Truth About Money, a 1Life Insurance Initiative, to help you understand and manage your debt.
Top tip: If you feel overwhelmed by your debt and cannot manage your monthly repayments, speak to your financial adviser or a debt counsellor. Remember, The Truth About Money also offers debt management services including telephonic debt counselling, debt consolidation and debt settlement.
Tip #6: Don’t neglect your taxes and estate planning
When you’re stressed and life is busy it’s easy to neglect important things like your taxes and estate planning. To ensure you don't create any extra financial stress, make sure the formalities such as your taxes and will are up to date.
“Update your will or get it drafted today,” says Mulalo. This will ensure your loved ones inherit as you intended.
Truth About Money offers a Wills & Estate Benefit that will draft a free, expert will for you and your spouse.
You should also make sure your taxes are up to date. Mulalo says you should consider using an expert who can help you submit returns when they are due, ensure you get all the deductions you qualify for and avoid penalties.
Yes, you can do it
As impossible as it might seem you can take the steps you need to live within your means, take control of your budget and debt and worry less about money. And remember, you are not alone. Always ask for help if you need it.