The first few months of the New Year are over. How are your New Year resolutions going? For many of us, new goals towards financial freedom are high on the agenda, however as the year ticks on, sticking to these goals becomes challenging.
Boitumelo Mothoagae – Financial Adviser at Liberty says, “While maintaining financial wellness may seem like a difficult task, small changes can make all the difference in getting you closer to your financial goals. By reviewing your finances and spending habits as often as possible, you should be able to save money on the non-essentials and make changes that will assist you in realising financial freedom.”
Creating financial awareness around your spending habits can have a significant impact on your life and will save you money over time. Mothoagae gives suggestions on simple solutions for better money management:
1. Rewards and loyalty programmes – Nobody gets rich with points. Loyalty programmes have become really popular in South Africa. According to the South African Loyalty Landscape 2018/19, 81% of consumers belong to a loyalty programme to collect points and earn rewards. While rewards are the main benefit of joining these programmes, if you are not earning enough points to outweigh the monthly cost to be part of it, you are actually losing money.
2. Gym contracts – Long-term money guzzlers. South African health statistics are bad enough to make anyone want to sign up at the nearest gym. There are many options for exercising that do not cost money. Weekly park runs or workout programmes at home can help you assess if you are ready for the financial commitment of a gym contract.
3. Cell phone contracts. American fact tank, Pew Research, reports that more than half of all South Africans now own a smartphone, but our data and voice call costs are some of the highest in the world. To keep up with increasing data costs and to ease the burden of paying cash for a phone, more users are opting for a cell phone contract. There are various contracts aimed at servicing the different needs of consumers, but the costs associated with a cell phone contract can end up being higher than a pre-paid option.
4. Unauthorised debit orders. Fraudulent debit orders often go unnoticed because only small amounts of money are taken off the account, below what some banks would normally notify their clients about. A recent debit order scam reported to the Payments Association of South African, affected almost half a million people in South Africa.
If you’re serious about building wealth, be vigilant about all transactions that go off on your banking account. That way you can track all your spending and note any irregularities that occur.