Can you believe we are halfway through the year already? The year has flown by during the nationwide lock-down as a result of the global pandemic and many South Africans have had a tough financial start to the year. Although many are saying 2020 is a write off, there are some changes to make to your finances to make the latter half of your year more bearable. Here are some tips on what you can do better to get your finances back on track for the other half of 2020.
Now is the time to start your savings
If you couldn't start saving in the beginning of the year due to job loss or not being able to earn an income because of the pandemic, now is your chance to start. The economy is slowly regaining traction, and this makes way for you to start putting away what you can into a savings account.
By putting money towards a savings account in your budget, you can start building up an emergency fund. This way, you will be able to fall back onto your emergency fund if you ever end up in a sticky situation such as retrenchment or a medical emergency. This also prevents you from taking out more credit in an emergency and makes sure your finances are protected.
Even if you can only put away a small amount of your budget towards savings, it will build up and help you to be prepared in your time of need. Meerkat’s new Savings plan allows you to start saving from as little as R25 a month. For more on our savings plan click here.
Evaluate your debt repayments
Paying off your debts is essential to a good credit score. Having a good score allows you to take good credit out for a bond or a car. It is a good idea to evaluate your debts mid-year to make sure you are making all the necessary repayments. If you are affording your debt repayments, you're on the right track to financial freedom. If you cannot afford to pay off your debts because you need your money to survive, you should consider a debt repayment plan.
When you sign up for a debt review plan, all your assets are protected, and you pay off your debts at an amount that is affordable to you. Your debt repayments are reduced, and a budget is drawn up by your debt counsellor considering all your living expenses. The duration that you are under debt review depends on the amount of debt to be repaid but it cannot exceed 5 years. You are unable to take out credit whilst in debt review this is to prevent you from getting into more debt and spirally out of control. As soon as you have completed the process your credit record is cleared, and future lenders will look on your more favorable.
If you are interested in getting your debt under control contact us here. We’ll even kick start an emergency fund as part of your repayment plan, so you no longer must rely on debt to fund unexpected expenses.
Factor in price changes
Food and petrol prices will increase during the year, so it is good to take advantage of mid-season sales now. Try to stock up on frozen goods, washing powder and things you need for the rest of the year as you might end up saving money now before the prices increase. Small changes can create big changes in the future.
Start saving for the holidays now
When December hits, many choose to take out credit to afford gifts for family and friends. If you start saving for the holidays now, you will be building up the reserve you need so you do not need to take on debt to buy gifts. Remember, it’s the thought that counts and often handmade gifts are even better appreciated.
Revise your budget
Compile a budget for the end of the year to stay on track. Doing this will allow you to ensure that your money goes to where you want it.
Making a budget is simpler than you may think, and it can improve your finances, it essentially allows you to see where your money is going. Check out how to start a budget. Once you have finalised your budget, keep it somewhere to check in with each month to make sure you are sticking to it. This will help you manage your money more effectively.
Making these changes to your Mid-year finances can help you on your path to financial freedom. Save your 2020 now and get started with that budget. For any assistance give us a shout.