30 Jun Beginners Guide on how to handle your finances better

Investing the time to learn how to manage your finances better will pay off in the long run because you will be able to save more money to buy your dream car, pay off debts, invest in your business, or even buy that new pair of sneakers you have been eyeing. Here are some pointers on how to effectively budget, keep track of your expenses and savings, and save those extra pennies.

1.    Basic Monthly Budget

• Make a list of your monthly fixed and variable income revenues and total them all.
• Make a list of your monthly fixed and variable expenses and total them all.
• Ensure that you categorise your expenses, such as groceries, toiletries, entertainment, rent, transportation, gifts, gym membership, and so on.
• Make a copy of this every month because costs may vary or change from month to month.
• You can use apps like Buddy, which tracks every income and expense for you and sends notifications for any expenses that have a deadline.

2.    50/20/30 Rule

This is a money management technique that divides your monthly income into three major categories:

• 50% – goes to necessities such as groceries, toiletries, rent, transportation, phone contract, car instalment, etc.
• 20% – goes to savings accounts such as fixed deposits, forex, bitcoin, etc.
• 30% – goes to entertainment, clothing, gifts, or any other expenses that the 50% does not cover.

3.    Money Envelopes

•       If you don’t like keeping money in the bank and prefer to have it on hand in cash, divide your income into different envelopes.

•       Each envelope will be labelled with the amount of money to be spent on groceries, transportation, entertainment, and so on.

•       For better management and security, keep these envelopes in a flip file or a folder.

3.    Notice Account

• You can open a notice account to avoid easily accessing your savings.
• The Notice Account is very effective because you must send a request to the bank to gain access to your funds by providing a notice period of, say, seven or 32 days.
• This means you will have to wait seven days for the funds to be transferred to your main account; if you want an immediate withdrawal, the bank will charge you up to R105 to gain immediate access to the funds in the savings.
• Standard Bank, Absa, Nedbank, and Investec are a few of the banks that offer Notice Accounts, check with your current bank.

Money management is important because it helps you avoid overspending, running out of money in the middle of the month, and buying unnecessary items. Yes, keep your finances in order, but don’t forget to treat yourself.