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Personal Finance Playbook – How To Improve Your Finances

Couple working together to improve finances by working on their laptop and analysing documents

The reason doesn’t matter, knowing how to improve your finances is an indispensable skill to have. 

Your financial health is affected by all of your spending decisions. It is common to follow specific guidelines, such as “don’t buy a house that costs more than two and a half years’ income” or “always save 10% of your income for retirement.” Although this advice is timeless, it is still crucial to consider what specific things you should be doing to improve your financial health. So, let’s dive into how to improve your finances.


How to start improving your finances today

Reduce unnecessary costs 

Cutting your monthly expenses is one of the easiest ways to take control of your finances.

Even though there’s no way to reduce certain fixed expenses, such as rent or car payments, you can reduce your variable expenses, such as clothing, entertainment, fees, and other recurring costs. You have to be harsher on yourself and think, do I really need this? 

Start by going through this list and follow through on as many of these suggestions as possible. Every bit counts, and the reduced costs added together create a significant savings amount that will definitely improve your finances.


Finding a bank with lower fees and higher interest rates

When your bank charges too much in fees or doesn’t offer competitive interest rates, you’re losing money. A quick search of alternative services and a switch can be accomplished in less than an hour.


Comparison shop your insurance

Make a comparison call to other insurers at least once a year. You may be surprised to learn that you can significantly lower your auto, home, or life insurance premiums by switching service providers or by negotiating with your current provider.


Reduce your credit card interest rate

Do you pay outrageous interest rates on your credit cards? Request a lower rate from your credit card company. The rate may come down if you’re in good standing as a customer. Request a supervisor if the first representative is unable to assist you.

Pro-tip: It’s even better if you can reduce the use of your credit card overall.


Cut down on cable TV and other subscriptions

If you’re looking for ways to cut monthly bills, you may be able to save a lot just by cutting your subscription costs. Consider cancelling your Dstv or Netflix account, if you want to reach your financial goals more quickly.

There’s no need to stop watching TV altogether or completely cut the cord. Simply eliminate costly extras in favour of a lower-cost alternative like a streaming service or reduce the number of subscriptions that you have.

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Improve your spending with better meal planning

It goes without saying that if you want to save money, you’re going to have to eat out less and make your own food. Plan a monthly menu so that you know what to get and end up wasting less food. There is even an app for it. 

On average, South Africans spend R3 618 per month on groceries. That may not sound like a lot but over the year that’s roughly R40 000. Making sure you don’t waste food sounds more important now doesn’t it?

Pay off any lingering debt

Carrying plenty of debt (especially high-interest credit card debt) is one of the most costly mistakes that you can make. Pay off your debt as soon as possible if you wish to change your financial picture.

Identify all your current debt, whether it is credit card debt, student loan debt, or a car loan, and determine how much you need to pay to stay current. If you just pay the minimum amount, you won’t be able to get out of debt quickly, so evaluate your fixed expenses and determine how much you can allocate toward debt repayment.

To reduce the interest rate on the debt, try asking for a lower rate, consolidating multiple debts into one, or transferring high-interest debt to a low-interest credit card, similar to a balance-transfer card. Also, set up a debt payment plan, and adapt the above sound spending habits to pay off the debt as swiftly as possible.

Get in touch to learn how debt review can help on your journey towards debt-freedom, or check out our blog on mistakes to avoid when repaying your debt. 

Increase your savings and investments

Read finance books

If you are struggling with finances, do know that books offer a great way for you to change your approach to managing money. Buy used books or visit your local library. Picking up your first finance book will have a ripple effect that could catapult your financial future to new heights over-time.


Get a budget going 

Proper spending requires an effective budget. Create a personal budget if you’re having trouble handling your finances. A budget will help you plan your monthly spending, optimise your savings and investments (remember: pay yourself first), and track your financial priorities.


Find additional sources of income

Consider ways to generate income on the side or in addition to your current job. If that sounds too intimidating, try getting a better paying job or working towards a promotion. If you add value then others will take notice and you’re sure to hit a stride in your career.


Start investing for the long term

It’s not just about saving money but also ensuring you’re getting more at the end of the day. A great way to secure your financial future is to invest. And your investment options go far beyond just stocks or property. For instance, for a safer approach, you can invest in high-yield savings accounts that will provide higher rates of return than you’ll get with traditional bank accounts. Spend some time researching investing before you dive in and try out creating a demo account if you want to try creating your own stock portfolio, but want to gain experience before using your actual money.

In addition, funds and bonds can be a safer way to invest rather than picking individual stocks. Fund directors will have a particular investment strategy and will generally be looking for long-term investment returns. It’s wise to read all documents regarding the investment portfolio to ensure they’re in alignment with your risk profile and anticipated return on investment.


If you want to improve your finances, but you’re stuck in a cycle of debt and have no idea how to get out of it, we can help. Financial freedom isn’t a sprint, it is a marathon and we can help get your finances in shape on your journey towards building wealth by providing you with professional help that can help you to completely reduce and eliminate your debt over time. Let’s get your debt-free

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Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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