Five smart tips for cash-strapped South Africans

Five smart tips for cash-strapped South Africans

Wayne Paries, a Certified Financial Planner at SWI Financial Consultants, shares five tips to help you manage your finances better and be debt free.

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Millions of South Africans are struggling to make ends meet and, as a result, many are tied up in debt. 

The 2021 SA Reconciliation Barometer (Sarb) shows that nearly half of all South Africans have been unable to pay their debts. The COVID-19 pandemic also made the financial struggles worse, with many losing their jobs or getting a salary cut. 

Wayne Paries, a Certified Financial Planner at SWI Financial Consultants, says the first step to getting your finances in order is to have a budget. 

"It starts with drafting a monthly budget and trying to stick to it," says the financial advisor. 

There are many benefits of having a budget. It allows you to track how much money comes in and how much money goes out. It is also a great way to have an honest evaluation of your finances. 

But the most important part of the budget is sticking to it. Otherwise, budgeting becomes a futile exercise. 

READ: Teaching your children to be savvy about money

Wayne says the second useful tip "is to not take on any new debt". 

It is common for people to become over-indebted because they take out other debt to cover a previous debt they couldn't afford to pay. 

If you are struggling, rather talk to your financial advisors and make arrangement to pay for your debts instead of taking out more debt. 

Thirdly, Wayne says those who are cash-strapped should consider consolidation. 

"Consolidate your debt and pay off the debt that charges the highest interest rate first," says Wayne. 

READ: Financial tips for stay-at-home partners

"Fourthly, set a goal to pay off your debt sooner, this will bring down the repayment and your interest payments and the instalment and interest saved can be invested," says the financial advisor. 

Getting rid of your debt sooner might require you to drastically reduce your spending, maybe even limit your purchases to only those you need instead of things you want. 

Wayne says the fifth smart thing to do is to save. 

"Start saving towards a savings plan/investment for emergencies," says the expert. 

It is also advisable to speak to a financial advisor who will assess your financial goals and help formulate a plan that is tailored for your circumstances.

READ: How much should you really be spending on insurance? 

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Meanwhile, for more budgeting and personal finance advice, check out our JacPod podcast, The Money Podcast, where self-made entrepreneurs Justin Harrison and Dawie Bester go off script and tackle controversial money issues, providing an alternative perspective on everything related to personal finance and money. Because money doesn’t have to be complicated or boring.

Wayne Paries
Wayne Paries / Supplied

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