World

Six Top Tips For Financial Readiness; S. Africa Edition.

Although many South Africans face financial constraints, they tend to be just as ambitious as most other people around the world. Large salaries, exquisite vehicles and multiple properties are on many South Africans’ wish lists. Despite the challenges many people face, there are several steps people in South Africa can take to improve their financial readiness and well-being. This suite of financial recommendations comes from payday loan brand ’wonga’:

Funding your daily needs

Once someone achieves financial readiness, they can start making more progress in life and take comfort in the fact their daily needs are met. Some people regard financial wellbeing and readiness as being free from poverty, whilst others define them as being able to afford the finer and more luxurious things in life.

Financial health in South Africa

A survey carried out by the loan provider found that a lack of funds was causing many South Africans to fall short of the education they needed to achieve their aims. Most South Africans who do complete higher education end up in the top 15% of the country’s earners. However, 58% of respondents said they do not have access to higher education. Almost 90% of those taking part in the survey aimed to earn as much as the country’s top 10%. 99% of respondents said they would like to own a property, with most of these saying they wish to purchase at least two. Almost two-thirds of people said they would rent out their second property. However, most people were still renting their homes. Only half the respondents said they were saving for retirement at present.

Do your priorities need to change?

Although most respondents were incredibly ambitious, it seems they may need to rethink their priorities if they are to achieve financial comfort in later life. A good credit rating and savings are essential if they wish to become property owners in future, though many respondents said they were restricted by lack of access to higher education.

Let’s look at some of the key tips for improving financial readiness in South Africa.

Although saving money may seem incredibly challenging, even making small sacrifices can make a big difference. By saving a minimum 10% of your pre-tax earnings, you can start making improvements to your financial situation in South Africa. Once you start saving money and pledge not to touch it, things can become much easier. You don’t even need to send money to a savings account manually – by setting up a direct debit, you can automate the process.

Recording your spending

Do you know where your money is going? Keeping track of your expenditure can help you cut down on those unnecessary purchases. What you may regard as small purchases can easily build up over time. Try to prioritise the things you need over what you desire. Once all the bills have been paid, including the money you’re sending to a savings account, you can use what’s left on things you want rather than need.

Shop around for a better deal

Could you get better deals on banking, insurance and medical aid? You may be paying much more than you need to. It’s always a good move to get online to see if better rates are available. If you cannot negotiate a better rate with your service providers, see if cheaper options are available elsewhere. Your phone may also be costing more than you think. Try to switch off the internet when you’re not using it so you’re not wasting costly data. If you are a driver, don’t put off repairs and maintenance as this is only likely to lead to bigger bills further down the line. These are just some of the steps you can take to improve your financial readiness.