Losing weight, getting to the gym three times a week, cutting down on sugar, increasing your savings, learning a new language… what are your resolutions for 2020? How likely is it that you will stick to them?
We all mean well when we giddily make plans at the beginning of January. While we’re pretty good at keeping to our resolutions for the first few weeks, come February, we’re buying things we don’t need and going in for another helping of dessert.
Also, have you seen the parking situation at the gym in February, compared to January? It’s much emptier since people’s fitness resolutions fade as quickly as their savings accounts.
We get it — it’s hard to keep up the good intentions. That’s why we’ve broken a big financial resolution into smaller steps that will help you to achieve financial fitness in 2020.
Here are the steps on how to save money each month and end off 2020 on a good foot:
- Do a stock take and assess your situation
Knowing exactly what you have, how much you owe, and what’s lacking in your financial plan can help to guide you on what you need to do in the future.
- Draw up a budget
It’s not the most fun of exercises because it means you not only have to take a hard look at your situation, but also cut down where possible.
By figuring out your fixed and variable expenses and scrutinising what you’re spending, you’ll be in a better position to manage your money.
The budget rule of thumb is the 50-20-30 method: 50% of your net income should go towards your needs, 30% towards your wants, and 20% to your savings options, and debt repayments.
For this to work, you need to stick to the limits that you set for yourself and distinguish between a need and a want.
- Review your insurance
Are all your policies up to date and are you sufficiently covered? You could be financially crippled if you’re in an accident, for example, and you don’t have car insurance. If something happens to you and you don’t have life insurance, then your family carries the huge financial burden.
- Start saving for your child’s university education as soon as possible
By putting away for university now, you save your child the burden of paying back university loans which will affect their financial fitness as adults. Look at the best savings plan available and just get started. The sooner you start, the less you have to put away in the long term.
- Start settling the debt
Whatever debts you have, start by paying off at least one rather than trying to settle all of them at once — which might not be feasible. Choose one with the highest interest rate, like a credit card, and put aside an amount each month in your budget to start paying it off.
- Start small and start saving
One of the easiest ways to start saving is with a flexible savings account. This allows you to choose how much to deposit and when to deposit. You have full access to your cash in case of an emergency, but your money will still grow if left to accumulate interest.
- Put aside money for emergencies
Setting up an emergency fund prevents you from dipping into your savings, which isn’t there for fixing the plumbing or buying new tyres. A comprehensive budget will help you to decide just how much you can afford to put aside for emergencies and savings.
- Shop around
Are you getting the best medical cover for what you’re paying, and does your bank offer the best savings interest rates? It takes a bit of work, but shopping around and finding good services at better rates could save you/or earn you thousands in the long run.
- Consider a Savings Pocket
If you’re saving for something big, like a holiday with a group of friends, then the MyWORLD Savings Pocket from African Bank is a great option. It’s linked to your Primary Account, and allows the Primary Account Holder to save at SA’s best interest rate of 6.5%* interest per annum on any positive balance while enjoying immediate access to their funds.
You can add up to 10 members to a Savings Pocket, all of whom will be allowed to view the balance and make deposits.