4 Simple ways to uncomplicate your finances

15 February 2016
3 minute read

Image of the 1Life logo

Life can get complicated, and at some stage, most of us have uttered the phrase - “it’s complicated”.

One area in our life that often seems over complicated, is our finances. Between bills, monthly payments, interest and investments, all these terms can leave many feeling overwhelmed, and looking for ways to simplify their financial lives.

But sorting through your finances doesn’t have to involve complicated maths formulas and calculations. In fact, all it requires is a few simple steps, which can have a huge impact on your overall financial position.

Consumers are currently struggling to manage their finances given the harder economic conditions being experienced. In fact, in a recent 2015 Finscope study it showed that the number of people struggling to make ‘ends meet’ has increased by 4%, since 2014. So now would be the best time to find ways to declutter your finances so you will be able to understand how to manage any impact, much better going forward – without stress and complications.

It’s simple really - follow 1Life’s 4 simple steps.

1. BudgetYes, sure - you have heard this term over and over again – but very few people know how to create a budget, never mind having the discipline to stick to one.

However, the reality is that without having a budget, you are setting yourself up for a financial disaster by not monitoring your expenses and planning for the month ahead. In fact, it's very difficult to simplify your finances without drawing up a budget that will guide you on what you are spending and where your money should be going every month. Drawing up a budget doesn’t have to be complicated, so whether you choose to jot down your budget on a piece of paper or capture it on a spreadsheet every month - the most important thing is to make a start and always refer back to it, to help you stick to it. There are various online tips and tools that can provide advice on helping you structure a budget.

2. Pay close attention to your bank statementsAny finance guru will tell you that one of the most important steps to taking control of your finances is to pay close attention to your monthly bank statements, but the thought of doing this is often enough to set anyone into full panic mode.

However, going through your bank statement(s) helps you keep track of where your money is going and see if there are any unnecessary charges that you can reduce or even cancel. Although certain amounts may seem small - they all add up.

3. Identify your spending habitsUnderstanding your financial behaviour is an important step in making your finances less complicated. Things to consider when doing this include:

  • Writing down what you spend your money on each month
  • Tracking other spending that crops up
  • Writing down your current credit and understanding if you are adding to this or trying to minimise your debt
  • Identifying things you spend money on that you don’t need

From there on you can make the decision to change your habits, if you need to, by choosing to cut down on ad hoc purchases or cutting back on monthly expenses that are luxury and not a necessity. Here, think about the savings that can be made by these changes, and think about putting that money towards other expenses, such as reducing your debt.

4. Register for a free financial literacy course One easy tool to examine when looking to make your finances less complicated, is to check the internet for free support, like the Truth About Money – a 1Life initiative. Truth About Money offers a financial education course that is available – for free - to all South Africans looking to get out of debt, build their wealth and secure a more promising financial future through behavioural changes. Not only will this course help you understand your finances, or how to draw up a budget, but more importantly, how to manage your debt and start saving for your future.

Click here to apply today – it could just change your life.

Uncomplicating your finances is not as difficult as it seems, but it starts with making a decision that will require you to tackle one area at a time. Before you know it, you will be on track towards more financial freedom and reduced financial stress in the long run.

Enter your name and contact number and one of our consultants will call you back:

Please type in your name
Please type in a valid SA number
Please select what your query relates to
Call me back