Currently in South Africa there has been a lot of press coverage on the amount of unsecured debt (personal loans, micro-lending) being given and how sustainable this is for the end consumer. At DebtBusters, we have seen an increase in the levels of over-indebtedness, as well as the number of credit accounts held by the […]
27 November 2012
Budgeting is even more important now than ever with the well publicised price rises in electricity coming in. DebtBusters offers you 6 easy steps to formulate a budget you will stick to.
1. Collect all that paperwork
Whether all your paperwork is neatly filed away in alphabetical order or you store everything on your PC, the first logical step to budgeting is to become a gatherer and get this all together. This includes bank statements, all bills and your pay cheque. Yes, this is not the most exciting way to spend your time, but once this first step is complete you will be on your way to getting your finances in order.
2. Understand your spending habits
Sometimes it feels easier to turn a blind eye on what you are spending and what you can reasonably afford, however in the long run you are only digging yourself into a deeper hole. To give you a better idea of your spending habits, set up a spending diary and for one month write down on a daily basis everything you spend money on – yes, even those quick stops at the local cafe down the street. You will be surprised how much extra you will need to include in your budget as a result of all the ‘little things’.
3. List your income and expenses and stay on track of your budgeting plan
This is where all that paperwork you collected comes into play. On a piece of paper divide the page into two columns. One column lists all your expenses and the other your income. Then compare the two. Most people will find that their expenses outweigh their income but do not be discouraged as this is a big leap to becoming in control of your finances. You are now aware of your situation and can take the necessary steps to change this.
4. Cut it out of your budget!
If you came to the grim conclusion in step 3 that you are in fact spending more than you earn then there is no time like the present to tackle this head on. The truth is that you will need to cut down on your spending. DebtBusters offers you many ways to do this, but a good place to start is with food bills, your social life and clothes shopping.
5. Save all your cents
If you are one of the lucky ones and you have money left over each month then it’s imperative you save this. Moving this from your current account to a savings account is your best bet as this will fight the temptation to spend this.
6. Finally, do not fall into the trap of forgetting about the budgeting process
Circumstances are changing all the time and at least once a year you should review your budget and make the necessary changes. Budgeting is an essential part of every day life. Remember… you are not alone. DebtBusters are here to help you, so if your debt is spiraling out of control and you do not know where to turn you do have a lifeline.