Calculate your real monthly spend
Often, what you think you earn and what you think you spend is substantially different from the true numbers reflecting in your account. With a copy of your latest payslip and a recent bank statement, look at the following numbers:
What is your gross income? This is the amount you earn at your job before any statutory deductions, e.g. tax and UIF, are deducted.
What is your net income? This is the amount you have left over after statutory deductions.
You are now left with your disposable income. All your personal, essential expenses are paid from this money – i.e. pension, medical aid, housing, travel costs, food, clothing.
Your discretionary funds are now left over. This money is not committed to mandatory payments. Your discretionary funds are used to pay your creditors, save, invest, or use however you see fit. If you cannot pay all your creditors from this money, every month, you are in trouble!
Make cuts where you can
Even if you are living comfortably within your means at the moment, something unexpected could happen or the day may come when your earning potential is not as high. Therefore, we always advise our clients to trim their expenses as much as they can. The money you save, is used to accumulate a nest egg for unforeseen eventualities.
Here are a few of our top tips to get started:
Don't buy what you need, buy what you can't do without.
Put a timer and insulation blanket on your geyser.
Invest in an on-the-go flask for coffee and tea when you're on the road instead of buying hot beverages.
Pack your own lunch from home to bring to the office every day.
Invest in reusable cloth bags instead of shelling out for plastic shopping bags every time you go to the store (also saves the planet!).
Sit down with your partner and look over your monthly expenses. Get creative about where you can trim it down.
Put all the money you save on the above, into a separate savings account and see it grow!
DID YOU KNOW? You are entitled to one free credit report per year from the credit bureaus. If you battle to understand the intricacies of the report once you’ve obtained it, you can contact Libertine Consultants for a thorough credit analysis (i.e. a breakdown of the information in your report).
Get in touch & stay informed
Is your debt out of control? Get in touch with a Libertine Consultants representative as soon as possible. We are here to assist you in making sense of your finances and returning to a state of financial equilibrium.