Budgeting – right up there with going to the dentist, doing your taxes and dealing with Telkom. Almost everyone will tell you they don’t budget because it’s either too hard, too boring or just too scary to see where their money goes.
The problem is our lack of budgeting is hurting us. South Africa has one of the lowest savings rates around, with around 5% of the population saving for their future. The best way to start saving is to adequately evaluate your finances – budgeting.
I Don’t Have Time For This
The first and most common excuse for not budgeting is that it simply takes too long. It’s a little like exercising! The problem with this excuse is it’s a little lazy. We all have time in the day and should construct adequate budgets.
The nice thing about budgeting is once you’ve done it once, it’s very easy to replicate. Most of us have a set of expenses we can anticipate each and every month: medical aid, rent, Retirement Annuity, petrol, food, electricity etc.
We also have a fair good idea of how much each of these cost. By doing a detailed “monthly expenses” section you never have to change it unless prices go up or you get a new expense.
I Budget In My Head
Sure you do. A lot of us try keep track of our funds mentally. The problem here is that most of the time we only really remember the big payments, letting small ones slip through. These small amounts quickly add up and could be the difference between ending the month on a negative or a positive bank balance.
Luckily there are now various spending tracking applications you can use on your phone. Mint,22Seven and even some online banking apps track your spending for you.
I’m Too Rich To Budget
The thing about debt is it doesn’t discriminate. Any one of us could end up in financial trouble if we aren’t careful with our spending. The thing about budgeting is it prepares you for that one time a year that a financial crisis arises. An unlucky motor vehicle problem comes along or your geyser bursts – these kinds of situations drain your funds and leave you scrambling for pay day.
Without a strong understanding of your finances these kinds of situations could leave you having to load up a credit card or borrow money at a high interest rate. From there on it’s easy for that amount to snowball and get you in trouble.
I’m No Good At Maths
A common complaint about budgeting is that it requires higher grade maths to get figure out how much you actually have. This couldn’t be further from the truth. With internet banking it’s now possible to see exactly how much money you’re spending each month on petrol, groceries, evenings out etc.
Now all you need to do is stick those numbers into a calculator and you’re set. Budgeting requires even less maths if you keep going down the technological route – spending trackers offer you the chance to indicate expenses at the start and then keep track of them in the future. No maths, no fuss.
I Just Don’t Want To Know
Debt is a scary thing. The scariest thing about it is how quickly it grows. It’s natural to want to avoid an uncomfortable and honest look at something you have been ignoring. Unfortunately this attitude only leads to greater debt. Approach your debt like any other problem – first identify where your money is going and then from there you will be able to see a way out.
Budgeting is your first step to getting out of debt and it’s the easiest one out there!
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