The 5 best ways to manage your money

When it comes to managing your money well, you may think that the best way to manage your money is by increasing your income. This is not always the case. While there are definitely times when, regardless of how you cut your spending, you just can't manage what you have, there are also times when:

1. Realistically, you aren't in the position where you can increase your income.
   • Whether this means you aren't able to get a new job or a promotion. Whatever your reality or reason, increasing your income can sometimes be an unrealistic method of managing your money well. 
2. An increase with your income does not necessarily mean you will be able to manage that increase well. 
   • It's essential that we all learn how to manage what we have now instead of just waiting for an increase that may or may not come. 

So, how do you manage your money well WITHOUT increasing your income. 

1. Track your current income and spending 

   To gain a proper understanding of your money and how to manage it well, you first need to look at the full picture which includes, knowing your income and where all your money is going. Sometimes we think we have an idea of where all our money is going, but by intentionally setting aside time to track and really account for where every cent is being spent, you won't just have an idea, you'll know for sure. 
   
   The aim of tracking your spending is also to identify what we'll unpack in step 2, which is to find ways to reduce your spending. 
   
   To fast-track this process, download our FREE, customisable budget template here.

2. Reduce your spending 

   Look at what you've tracked. Now identify what you can either cut completely from your spending or what you can consider 'downgrading'. Does your family really need a 100Mbps line speed for wi-fi or can you reduce the speed of the line and save money?
   
   Do you really need to be subscribed to Amazon Prime, Netflix, Disney+, and Apple Tv+ or can you reduce your subscriptions to just one? 
   
   Or perhaps it's even just with groceries, can you look to buying generic shop brands instead of more expensive ones? Should you be eating out less?
   
   These are the questions you should be asking yourself as you work through your budget. 

3. Pay off or reduce your debt

   A key element to managing your money well is reducing your reliance on debt. By paying up your debt, you also indirectly free-up cash and increase your income. Remember, when you have debt like retail accounts or credit cards with high interest rates, you are spending more than your original debt amount. That interest is eating away at your money. 
   
   One way to pay off your debt is make use of the Debt Snowball Method. With this method you focus on targeting your smallest debts first. How does it work?
   1. List all your debts.
   2. Identify the smallest debt and pay more than the minimum balance on that debt each month until you've paid it in full. Continue paying the minimum balance on all your other debts.
   3. Once you have paid up your first debt, use that money to add to the minimum balance of the second smallest debt. 
   4. Continue this until you've paid up all your debts. 
   
   The other method you could make use of to pay off your debt is the Debt Avalanche Method. With this method you target the debt with the highest interest rate first. As with the Snowball Method, you would target the first debt by paying more than the minimum amount while paying minimum amounts on the rest of your debts. But unlike the Snowball Method, here you target the debt with the highest interest rate first. The idea is that you end up saving money in the long-run by getting rid of high interest debt first. 

Already struggling to make your debt repayments?

You might be over-indebted. If you are unable to keep up with your debt repayments, don't worry, you are not alone. Many South Africans, like you, are unable to keep up with paying debts and the rising cost of living. If this is you, we can help you with debt counselling. 

What is debt counselling?

Debt counselling is a debt relief programme that was introduced by The National Credit Act (NCA). It aims to help consumers struggling to pay for all their debt by consolidating all their debt, contacting their creditors to reduce the interest rate on their loans, and potentially reducing their monthly debt installment by up to 50%.

Read this blog post about how a family struggling to pay for all their debt was able to reduce their monthly debt instalment from R41 000 to only R18 000 with Meerkat.

4. Create an emergency savings fund

An emergency fund is a dedicated savings amount set aside specifically for when life's emergencies arise. These life emergencies include: a geyser bursting, tyres that need to be replaced, an unexpected pet emergency bill. 

You can't afford to be without an emergency fund. The reason for this is that often, when these emergencies do arise, and we do not have the cash on hand to deal with it, we resort to taking out credit. And already we've seen how essential it is to manage and reduce our reliance on debt. Our default to coping with life's emergencies cannot be to rely on credit. If you've done this in the past, it's okay. Don't feel shame about it. You were doing what you needed at the time to survive. But why not give yourself a better chance at survival? Start saving towards an emergency savings fund today. 

5. Consolidate or take out affordable funeral cover to protect your family

You could be spending too much money on funeral cover. A likely sign you may be over-insured and spending too much money is if you have multiple funeral policies at different companies. At Meerkat we can save you money by consolidating your funeral plans and still giving you the peace of mind of insuring all your family members. 

We also offer certainty of premium which means that the premium you signed up with won't increase. 
*Freedom Life members are subject to premium increases. 

We pay out valid claims within 48 hours of receiving the claim!

We offer affordable funeral cover that really covers the cost of funerals in South Africa.
Did you know: a funeral in South Africa could set you back by R20 000? 

Our funeral policy is underwritten by Old Mutual Alternative Risk Transfer Limited, part of the Old Mutual Group.

Who is Meerkat?

Meerkat is a financial wellness company that wants to help South African consumers do MORE with their money. We can help with debt repayment negotiations, provide affordable insurance and help you kickstart an emergency fund
Fill in the contact form on our website to receive a free callback from the Meerkat team today.