Nothing excites me more than money conversations because money is an integral part of one’s life. Whether you admit it or not, money influences the type of lifestyle and standard of living and/or quality you will enjoy. It is prudent, therefore, to prioritise your financial well-being, manage finances and stop living from pay cheque to pay cheque.
As we approach the end of January 2024, I hope you have recovered from the December/January financial ‘hangover’ and are ready to improve your finances. This week’s article shares strategies to help you stop living from pay cheque to pay cheque.
Break the ‘more month, than money’ cycle.
Salaries have remained the same or are growing marginally, which is sad. This makes it harder for many to keep up with the high cost of living and make ends meet. Research by FNB South Africa (2022) also found that it takes five days for consumers to spend up to 80% of their monthly salary, leaving them with only 20% to survive until the next payday. Not only is this startling but leaves many financially vulnerable, where they feel like there is more month, than money. While the situation seems dire, with some work and determination the cycle can be broken.
How can you break the cycle?
- Calculate and determine how much you spend on your monthly expenses e.g. LSL5 000. Review your expenses and determine where you can reduce spending and make lifestyle changes.
- As discussed in the article ‘Do not cut down expenses, increase your income!’ available on The Reporter’s website, where you cannot reduce spending or cut expenses, be creative and think outside the box to create additional income streams.
- Prioritise building savings to match your monthly expenses. While many Basotho argue that they do not have any money available to save, not having any savings is the quickest way to financial and mental health challenges! You can start from as little as L100 to nurture the discipline and build from there. The goal should be to build up to six times your monthly expenses (depending on your monthly expenses) e.g. LSL5 000 x 6 months =LSL30 000. Remember that it takes time, discipline and determination to achieve the goal. Do not be disheartened!
- Prioritise paying off high-interest loans. High-interest rate loans such as personal loans, credit cards and store accounts can hold you back or keep you enslaved. Develop a comprehensive repayment plan to reduce or settle loans. By so doing, you will have room to breathe and then build an emergency fund, savings and investment accounts.
- Work on yourself. The biggest hurdle to overcome if you want to stop living from pay cheque to pay cheque is YOU – the person in the driver’s seat. Unless you work on your mindset, attitude, discipline and spending habits, nothing will change. If you need to let go of your current lifestyle, you need to cut down some relationships and habits to transform your finances and life, there is no better time to start than now. Likhomo!
‘You need to make changes to see changes.’ (Spotebi.Com)
