Learn to keep your head above water with your finances

One often hears how people complain about how they cannot manage their money, and that they are forever in debt. Yet a lot of these people earn a fairly good salary, but they do not know how to work with their money.

Financial discipline is important. The best intentions that one can have is to have less debt and to cut your expenses so that you do land in a major predicament. Budgeting is the word!

Hint: Get a book in which you write down all your expenses and look at the expenses at the end of the month. Now you can easily tell how much you need to budget for food, clothing, recreation, telephone, petrol, and all the other things that a person needs. If you budget now and cut on unnecessary expenses, you can have a wonderful feast at Christmas without being in financial trouble again afterwards.

Credit cards: People should beware of credit cards and if needed rather take other forms of debt. If you use your credit card, you will end up paying much more because of the high interest. Many people have more than one credit card, or a credit and a petrol card. If you cannot pay your card bills, not even by using your savings, it’s time you reviewed your finances. Rather transfer the debt to the credit card which has the lowest interest rate. Thus you will just pay one monthly payment to pay off your different accounts (which you will already feel better about) and you have also have chosen the cheapest option. Get rid of your credit card if you cannot discipline yourself to only use a certain amount per month. The interest that one pays on credit card purchases, is blood money.

Know your limitations: It is often the case that people try to live beyond their means, sometimes just not to have to “hide away” from their neighbours or friends. Do you really need that expensive new car or can you rather still drive your current car? Are all those luxuries really necessary? Who do you want to impress? Are all those luxuries really worth it if you then lie awake at nights, worrying about the debts you have made and the years you will struggle to pay it off?

Christmas gifts and purchases: Make a list of everyone who you need to buy presents for – this way you don’t have to do last minute shopping at great cost at the pharmacy or the gift shop. Budget how much money you can spend on each person and stick to it. Also buy gifts in advance – gifts bought earlier are often cheaper. Also look out for special offers. Ask yourself whether an item that you are buying is really needed before you put it in your cart. Do not be swept away and hastily start buying. Stick to your shopping list. Think carefully before you withdraw money at the ATM. It helps nothing if you only have enough money to buy what you need today, if you know you have to fill up tomorrow and go to hairdresser. Rather withdraw the extra money and keep it in a safe place so you can use it tomorrow. Otherwise, you pay extra bank charges for two withdrawals instead of just one.

Convenience cards: Also take in consideration if the convenience of e.g. a garage card is really worth the effort. For example: if you have a garage card, you pay probably R250 per year for the privilege, as well as about R10 per time you use it. You can have save as much as R500 a year by not having a garage card.

Hint: Draw up a list and work out what you will need. Look out for special offers. Many stores have specials on especially cold drinks and food. Buy liquor in crates. It works out much cheaper than if you buy a bottle of wine, and what is left can be used as gifts. Buy meat in bulk and take cold drinks with you. Things like milk, bread and fresh fruit and vegetables can be purchased at your holiday destination.

Nowadays it is also perfectly acceptable to ask the family who come to visit, to assist with food and drinks. Decide in advance who is responsible for what.

ATMs: Be especially alert when you use an ATM. Criminals are especially active in busy shopping centres where unsuspecting ATM users are focusing on their shopping. Consumers should in no circumstances give their PIN to someone or write it down on a piece of paper or on a cell phone. Not even family members, friends or bank officials may know what your PIN is. Try to get as close as possible when using the ATM and use your body as a shield when you enter your PIN, so that other people cannot see your number. Criminals often use cell phone cameras to take pictures of your card and PIN. Only enter your PIN if the ATM asks you to do so. Do not accept help from a cheerful bystander. Criminals can distract you while you type in your PIN and can swap your card with another card. Cancel your ATM card immediately if it is stolen or if your card is swallowed by the ATM. Phone the toll-free number that appears on the ATM. Also mention anything suspicious at an ATM to the police or to the bank’s anonymous fraud line.