With the current inflation and petrol increase, it is more important than ever to plan for your and your family’s future. That’s why we created a top 10 tips for financial freedom. Cause there is no time like the present to start saving and making better financial choices. Let’s start with the bacics
Our Top 10 Tips for Financial Freedom
- Track your transactions
This might be a tip that is overused but this is also the tip that can help you the most. It helps you track your income and expenses. It gives you the ability to plan better for the following month and look at where are you spending your money and making changes to reach your financial goals.
- Learn to budget
Budgeting allows you to allocate your money and utilise your resources wisely. When budgeting create a separate sheet to track your spending, another sheet for your assets and liabilities, and a separate sheet for planning. Google Spreadsheets has an excellent template as a starting point and you can add what you need.
- Educate yourself on finances
There are many people that will give you terrible financial advice. It’s up to you to know the difference between good and bad advice. Read financial books, and blogs and watch educational videos. This is the best way to safeguard your money. Many people will tell you a stokvel is better than saving. Not true. Saving and investment accounts are better than stokvel because you gain against your capital with a minimum of 3% gain per annum.
- Pay your bills on time every month
Paying your bills on time every month improves your credit score and reduces notices and defaults on your credit report. Want to learn to manage your credit score check out my article “The hidden mystery behind your Credit Score”
- Reduce your purchases on credit
If you are planning on buying any big item things like furniture and appliances it’s best to do it in cash. Saving for the purchase gives you the ability for a discount on the price you pay and you pay no interest. Saving you thousands in many cases. The second option to cash is lay-byes.
- Pay yourself first
Get in the habit of paying yourself first. This is a great way of rewarding yourself and maintaining your motivation. This allows you to focus on your needs and you can use the amount you pay yourself towards your wants. Only pay yourself a percentage of your total income like 10%. Meaning you still need to budget with the amount and to increase the amount you pay yourself you need to increase your overall income.
- Diversify your income
Life is filled with uncertainty and relying on a single income source like a salary ties you down. Reduces your chances of financial stability and leaves you vulnerable if anything goes wrong with your employment. Start a side hustle, turn your hobbies into income bearing and start investing
- Set financial goals
As the saying goes “failure to plan, is planning to fail”. This is true for your finances as well. By setting clear goals you can align your decisions with your goals. Ultimately reaching your financial goals sooner with a clear plan. Using tools like vision boards is a great way to visualise your end result and a great motivator.
- Create a financial calendar
Use your calendar tool to set reminders for quarterly, semesterly and annually payments on your calendar. Like your annual cloud storage renewal and website domains or your tax returns. This ensures you meet the deadlines and can budget for those events. Include a list of payments that is not monthly on a separate spreadsheet on your monthly budget to have easy access to all financial information.
- Track your credit score and credit report
Your credit score and credit report paint you a partial picture of your credit history and life. It shows you how you have managed your credit over the past 24 months and what impact your choices have had on your credit score. If you know your credit score you can keep track of the fluctuations in your score and maintain or even improve it.
That is my top 10 tips to improve your financial situation and help you plan for a better financially free future.
If you have any tips to add share them in the comment section. We love hearing from you. If you have any questions or concerns feel free to also drop a comment. Let’s build a better financial literate South Africa together.