The ability to manage money efficiently is crucial, more so now as South Africans try to adapt to these challenging times and having to stretch their money to survive.
As the country continues to observe the national lockdown and now eased to level four, it is an opportune time for consumers to check that their money affairs and financial plans are in order.
Some of the key considerations one needs to keep in mind when reflecting on their money affairs are self-reflective questions such as ‘What are the next financial moves that I should be making?’, ‘What are some of the things that I could be doing better with my money?’ and ‘How can I ensure my family is protected whilst I change or optimise the way I manage my money?’.
Ester Ochse, Programme Head at FNB Money Management said, “Amidst all the uncertainty and financial pressures consumers are facing, one could also view the national lockdown period as an ideal time to review and go through their finances to ensure that they’re not only in the right standing, but that they’re also still on track in keeping to their financial goals.”
There are 4 major financial principles we tend to cast a blind eye or even procrastinate to look at. However, what we don’t realise is that, these principles sets a great foundation to how well we manage our money. “While one reflects on their finances, it’s important to review your spending and align it to what you value also ensuring that your family is protected. Equally as important is to review how you’re saving for retirement,” adds Ochse.
Ochse provides key points to consider when using this time to conduct a Lockdown Money Review:
- Take stock of what’s important to you and how you align your spending
Use the time you have during lockdown to reassess, explore what you value and how you can apply that to your financial life. It is important to clearly outline what you need versus what you want. At times, we tend to priorities on the things that we want and what is essential and needed. For those with a partner, it will be great for both of you but first do this exercise by yourself and then agree to what this picture looks like for you together.
- Prioritise – what is of value to you
Decide which of the wants you deem as most important and value. Thereafter, start directing your money towards them and fulfil. Most of us have limited amount of money so it’s crucial to first choose the ones that are most important to you. Predominately, the ones that will set you up for financial wellness in the longer term.
- Trade-off & Action – how much of what you spend every month is going to your value list
Once you have listed your priories and what you deem valuable to you, you then have to align and direct the money you spend to cater for the things you have listed. Going through your bank statements will assist you greatly to give you full sight of your spending and mark opportunities to eliminate over spending.
- Review & Repeat – making it a habit
To make this a habit, it can’t be a once-of ‘lockdown’ exercise. Set a time in your calendar to review this and going through the above steps on a quarterly basis. Values change over time and you have to check-in with yourself and adjust where needed.
“The lockdown continues to be a great opportunity to develop good financial habits. Use this time to assess and explore what you value and how you can apply that to your financial life. Implementing these simple changes in your financial behaviour could give you the necessary room to save for a better life,” Ochse concludes.