Managing money can often feel overwhelming, but it doesn't have to be. With the right strategies and mindset, you can take control of your finances and achieve your financial goals.
Personal finance coach and author of You’re Not Broke, You’re Pre-Rich (published by Penguin Random House SA), Mapalo Makhu, shares the ‘rules’ that financially savvy women live their lives by. Say ‘hello’ to financial freedom.
Live within your means
There’s no point in funding a Champagne lifestyle on a beer budget. Financially savvy women don’t use credit to fund an elaborate lifestyle.
She lives within her means while working towards her financial goals because she understands that true financial freedom is worth the sacrifice. She earns her money, invests it and only then does she live it up!
Have a budget
A budget isn’t a mental note you use to guesstimate where your money is going every month. A budget is something you’ve written down in an Excel spreadsheet (don’t worry, a piece of paper also works). And you need to plan for 3 to 6 months.
Yes, you read that right, you need to plan around 3 to 6 months in advance. Why? Because there are birthday celebrations, anniversaries and school excursions throughout the year that you need to budget for – and that’s before you consider any kind of emergency.
Think about it like this: for businesses to thrive and meet their cash-flow needs, they forecast (that’s really just a fancy way of saying ‘budget’) their expenditure well ahead of time. And so should you. You might not get the numbers 100% correct, but it will at least give you a good idea of what you should plan for financially.
Have a plan to tackle debt
Every cent you pay towards debt is money that you could be saving or investing. Credit card debt, overdraft debt and personal loans are majorly expensive because the interest rates charged are often high.
The first thing you need to do is know exactly how much debt you have, then make a solid plan of when, how and how much you’re going to pay back – crucially – without incurring more debt in the process. And because you have a plan, you’ll know exactly when the debt will be paid off.
Be open to learning
This is something I say all the time: to become more confident with money, you have to educate yourself – you can’t leave your education to chance, or your partner for that matter. It’s so empowering to approach a financial institution well-equipped with knowledge, rather than depending on them to give you the right information.
If you know the right questions to ask, you’ll get the right answers and solutions to your money pain points.
While it is, of course, important to manage your day-to-day budget, it’s just as important (if not more important) for women to invest for their future. A financially savvy woman knows that she needs to save for her short-term goals and invest in her long-term dreams and goals.
A financially savvy woman knows her Net Worth (you can work that value out by adding up your assets and deducting your liabilities) and works diligently to increase it through the following:
- Sticking to a budget
- Planning to eliminate debt
- Saving for retirement even if it seems like it’s a lifetime away
- Having an emergency fund
- Setting financial success as a goal
- Having both short-term savings and long-term investments
ALSO READ: 10 tips for coping with financial stress
Get ready to take control of your finances! Our mid-year finance check guide helps you stay on budget and on track. Discover the importance of …
