Know how much you actually earn
The first step to remaining debt-free is to know how much you actually earn. Even if you’re a salary earner who is paid a fixed amount each month (as opposed to freelancers and contract workers with variable income) you have to be aware of PAYE, UIF and any other deductions that are made from your earnings. This will allow you to draw up an accurate budget.
Gather accurate data on your fixed & irregular expenses
Fixed expenses are things like your mortgage payment or rent, insurance premiums, car instalments, etc. Irregular expenses include things like medical check-ups, entertainment, fuel, household shopping, electricity and any other expenses that vary from one month to the next. Keeping an accurate record of your expenses will help you to determine your spending patterns and see where you can cut down to save.
Check your credit record before spending
Did you know that you can check your credit rating? We can pull a credit report that (https://www.libertineconsultants.co.za/credit-clearance.html) will supply you with a detailed report on your credit record at a small fee. This information is invaluable and will allow you to make sound financial decisions going forward.
Understand your monthly instalments
Are your life insurance and disability cover premiums fixed or will it increase annually? And your cell phone? If you’re not sure, get in touch with your service provider so you can factor imminent instalment increases into your annual budget.
Make saving your #1 priority
Get in the mindset of building up a savings buffer. Even if you don’t live paycheck to paycheck, having savings allow you to become more savvy with your money. If you have enough money in your savings account to comfortably cover a year’s worth of living expenses in the event of an unforeseen retrenchment, etc., you can start experimenting with conservative investments with a dependable yield.
Keep your eye on the Libertine Consultants blog in coming weeks and months for more helpful advice on managing your finances effectively and staying debt-free in 2017. In our next blog we’ll share another five budgeting tips to keep you on the financial straight and narrow in the coming year.