Get money smart

Follow these 10 tips from Liberty’s consumer economist, Tendani Mantshimuli.

• Try to buy only what you can afford, and avoid getting into debt by buying on credit. On top of paying back your debt, you’ll also end up paying initiation fees as outlined by the NCA, so you’ll end up paying more than you budgeted for. So spend wisely.
• Use your credit card cautiously. If you are already highly indebted, pay off this expensive debt first. Paying late on your credit cards and store accounts attracts late fee charges — avoid these by paying on time.
• Use the “snowball” principle when paying off debt, that is, put extra money into paying off the smallest debt first, then use the freed-up money to put extra money into the next smallest debt, and so on.
• You can save on back charges by planning your withdrawals and make few large ones instead of numerous small ones. Also, using an ATM is cheaper than going into the bank’s branch.
• When you calculate your income for budgeting purposes, exclude the amount that you are saving from the income figure. That way you are less likely to use it for other things.
• Watch your electricity and water expenses. Switching off lights in unused rooms and fixing leaking taps, for example, not only helps Eskom and the water authorities but saves you money as well.
• Try to pay more on your home loan. Paying even a R100 extra can save you a lot of interest in the long run.
• Contributing to your retirement find earns you a tax break from Sars

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• Start saving as early as you can. As soon as you decide that you want something, start saving for it; even if you end up using debt to purchase it, the debt will be reduced by the amount that you have saved. And always save for something. Saving for its own sake will not keep you motivated to keep on saving, especially when times are hard.
• Different savings vehicles are appropriate for different savings goals. Speak to your financial adviser about your savings goals so they can recommend the most appropriate vehicle for you.