We know that the economy is volatile, but it’s still important to make room for monthly saving and continue practising prudent financial habits.
Eunice Sibiya, Head of Consumer Education at FNB, says, “As the cost of living escalates, necessary lifestyle adjustments must be made to ease the pressure on finances. These may involve having to cut unnecessary expenses on non-essentials such as entertainment.”
Tips to cut unnecessary expenses
- Review your bank statement
Your bank statement is the first financial document to look into when you want to cut expenses. Carefully reviewing your statement can help you identify expenses that may be causing leakage in your pocket.
- Create a solid budget plan
Look at your budget plan to determine where you can cut out unnecessary expenses, as well as where you need to allocate more funds. It will be helpful to thoroughly check your budget plan every month to ensure that you stick to it.
- Define needs vs. wants
Once you have defined your needs, it will be easier for you to drop your wants and channel these funds towards saving or creating an emergency fund.
- Minimise credit
More often, credit eats up a reasonable amount of your income. It is best not to apply for any new credit, while you work towards reducing the debt you already have.
- Live within your means
Everyone knows that they should spend less than they earn! If your income is R10 000 and your total expenses amount to R12 000, you are living beyond your means and need to make cuts to achieve your savings goals.
One of the best ways to avoid unnecessary spending is to translate the rands spent into the hours you worked to earn that income. If you spend what you earn a day on impulse purchases, it will be best to re-examine the spending behaviour that is keeping you from financial freedom.
Source: FNB. Image: Pixabay