You are a graduate with good qualifications and experience, you earn a decent salary but you still seem to have less money than you thought you would. This is why:
The thing about debt is that there are very few things you really should be using it for. The two major purchases where debt is unavoidable are your home and your car. These two purchases aside, avoid debt, save for what you need and you won’t spend chunks of your salary paying back credit and store cards every month
Ten years ago a salary of R30 000 a month would have placed you in a high income bracket. The major problem here is that salaries are not growing at the same pace as inflation. According to the BankservAfrica Disposable Salary Index released at the end of May, salaries have only grown by one percent once inflation is taken into account. Even if you have a partner who also contributes to the household income, there are still a myriad of expenses to pay – the bond, the car instalment, school fees, electricity, groceries, home and car insurance, life insurance, medical aid…..
Despite the high cost of petrol, South Africans seem to be obsessed with status cars. Do you really need a fancy, new sedan? Chances are you don’t. Get rid of it if you already have one and downgrade to a cheaper car that will cost less on a monthly basis and be more economical in terms of petrol costs. The same goes for where you live and what you buy. Don’t fall into the trap of trying to keep up with others.
Budget for what you need and spend carefully within that budget and you will find that you have the money you need to buy the things you really want. All it takes is a bit of discipline and of course delayed gratification.
Do you really have to have the latest generation iPhone? Probably not. Understand the difference between the things you want and the things you need. You might need a cellphone but it doesn’t have to be the top of the line model worth R10 000. What is worth more to you? A flash phone or an overseas holiday every three years?
Make sure that your finances are in good shape and learn how to manage your money better so that you have a little more in your pocket at the end of the month. Budget, save and curb the spending!