Is your money hiding from you?

By Janice Roberts

Priya Naicker, Advice Manager at Old Mutual Personal Finance

If you’re struggling to make ends meet at the end of the month, you’re not alone. According to the 2019 Old Mutual Savings and Investment Monitor, South Africans are feeling the financial pinch more than ever. But did you know that some of your money could be hiding from you and that, with some careful planning, you may be able to find some extra cash?

“Every day we make choices about how we spend our money – some are conscious, and others are the result of habit or impulse. By looking a little deeper into your spending habits, you may be able to find cash in all kinds of unlikely places,” says Priya Naicker, Head of Strategic Marketing for Old Mutual Personal Finance.

Know what you’re spending your money on – The first step is to know exactly how much money you are getting in every month, and how much is going out. Then have some fun learning about yourself through your spending habits. Are you spending on takeaways twice a week? For a family of four, this could amount to over R1500 a month. Your morning coffee on the way to work could be costing you an additional R600 a month.

To monitor these expenses, Naicker recommends downloading a budgeting app. “With an app like 22Seven, it’s easy to have a real time view of your money flow. By creating a profile and linking all your accounts, you can see all your money in one place. The app will sort all your transactions into categories and show you how much you spend on average per category. It will even give you nudges and advice on how and where to trim expenses, essentially helping you find your money that’s hiding in impulse buys and less conscious choices.”

Make budgeting fun – Armed with all the information you need about your expenses, you can start setting budgets with your app, trimming expenses that don’t resonate with the things you value and even activating alerts to remind you to stay the course. A budget is only any good if it integrates into your life, so that you can make adjustments when you stray off course and celebrate yourself when you achieve your goals. That’s why an app that you carry around with you at all times is your best friend when it comes to finances. “Often we think that budgeting is about depriving oneself of the things we enjoy. The reality is, when done correctly, budgeting is about fun! It’s about prioritising you, and making your best life possible,” says Naicker.

Setting inspiring goals for yourself can help you fuel better spending habits. By defining exciting short, medium and long term goals, you can start to channel your savings towards these goals and get a tangible view of the benefits of changing your spending patterns. Turn inspiration into action with a savings plan and other solutions that can help you achieve your life vision.

Do regular audits of your life – Review all your regular expenses every couple of months. “We all know how things sometimes pan out, you get a burst of enthusiasm and join the gym, but six months later, you’ve discovered you prefer running on the road,” says Naicker. “Or you subscribe to something that seemed like a good idea at the time and now you’re wondering what you were thinking. Cancel the subscriptions you don’t use, negotiate with your bank to see if you can get better rates and lower fees and review your data contracts when they expire to shop for the best deals.”

Shop smart – We all know the golden rule “don’t shop when you’re hungry.” As simplistic as it sounds, it works. So does buying in bulk, as long as you will actually use 100 black pens. And, if you aren’t going to use them all, split them with a friend. Buying refills for your cleaning products also costs less. By rethinking your shopping habits, you could save a few hundred rands every week, money which can be put towards paying off debt or increasing your savings.

Pass on a legacy – Talk to your children about budgeting and show them how they can make smarter choices with their money. You can also encourage savings as a lifestyle – instead of putting their spare change in a piggy bank, put it in an Old Mutual Money Account, which is affordable and helps you save as you spend. “Our children learn from the example we set,” says Naicker. “Coaching them to save for something they really want can help instil good financial habits that will set them up for life.”

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