Tips on how to manage your finances

WHILE you were at school, you only had to deal with pocket money. Now that you are a young adult with a stipend or a salary, you have to learn how to manage your money or
risk being constantly broke and in debt. Here’s everything you need to know about managing your money for the first time in your life.

 

CLOTHING ACCOUNTS
While there is pressure to look good, only get a clothing account if you can afford to pay back the minimum installment on time every month. Most young people make the mistake of opening accounts, using all of their credit limit and then failing to make monthly payments – this creates a bad credit record. As head of consumer education at FNB, Eunice Sibiya warns, “People often get into trouble when they shop on impulse and buy items they
have not budgeted for. Most impulse shopping is for items we rarely need.”

 

CREDIT CARDS
Most banks have credit card facilities for students. A credit card should not be for shopping sprees but to help you with emergencies. Once you have a credit card, be
wise with how you use it and pay it off. According to Robyn Farrell, executive head at 1st for Women Insurance, “It’s easy to break down goals into manageable milestones. It’s best to tackle credit first because debt attracts more interest than savings. Plan to pay extra into each credit account you have each month until they are up to date – and don’t take on any more debt while you’re at it.”

 

SAVINGS
Many young people make the mistake of not making saving a priority. Eunice advises allocating a portion of your money –whether it’s a salary, allowance or stipend – towards your savings every month. “Saving is the short-term practice of putting money away for a goal or unexpected expenses, so start saving now. It will have more impact on your life in the long run,” explains Eunice.

 

MANAGING YOUR BUDGET
A budget is a breakdown and plan of how much money you have coming in and what you spend it on. As a rule, no matter how pressed you are for money, pay your rent and
debt, buy food and make sure you never run out of money to travel to campus or your workplace.

 
▀ Buying groceries: Pull your money together with a group of friends and buy in bulk to reduce to cost of groceries.
▀ Entertainment: A limited budget doesn’t mean you can’t have fun. Some restaurants and bars have specials on food and drinks.
▀ Hair and Beauty: Do your own nails and choose a hairstyle that’s affordable and easy to maintain. Starting to manage your own money can be daunting, but with the right attitude and determination, you will soon learn to live within your means and even have cash to spare. For more help on managing your money, see if your bank has financial planners to help you get started