Taking charge of your finances can be daunting.<\/p>\n
Some people choose not to because they prefer to live in denial rather than deal with the reality of their situation.<\/p>
Others have no alternative, but are intimidated because they don\u2019t know where to start.<\/p>\n
Whatever your reason, it is always a good time to take the first steps towards becoming a financially confident woman.<\/p>
\u201cWhether you decide to take charge of your finances, or circumstances leave you with no option, there are some basics every woman needs to know,\u201d said Marlies Kappers, DirectAxis\u2019 head of marketing.<\/p>\n
\u201cThe first of these is to dismiss the stereotypical view of men as breadwinners and women as spenders; there\u2019s plenty of evidence to suggest that generally women are more cautious with money than men.\u201d<\/p>\n
This is borne out by some VISA research which looked at the financial habits of 2 000 South African women.<\/p>\n
\u201cA natural tendency to be careful with money is potentially an advantage, as long as excessive caution doesn\u2019t become a reason for not taking action,\u201d said Marlies.<\/p>\n
Just about all the expert advice says the sooner you do something about your financial affairs the better.<\/p>\n
There\u2019s a lot of it out there, but five common themes are:<\/strong><\/p>\n 1. Get real:<\/strong> You need a clear idea of what your income and expenses are. You can use a budget planner such as the one at https:\/\/www.directaxis.co.za\/products-services\/personal-loans\/budget-planner or just get an exercise book and open it across two pages.<\/p>\n On the left write down all your income and on the right all your expenses. Start with recurring expenses. These include things such as bond payments, rates, rent, and school fees – those costs that stay more or less the same from month to month.<\/p>\n Below these list variable expenses. These include transport, food and phone bills.<\/p>\n Look at old receipts to make sure you list all the expenses and work out how much each costs you on average. It\u2019s important to be honest with yourself and not to underestimate your expenses.<\/p>\n The difference between the left- and right-hand pages will give you an idea of how much money you have to work with each month and if you\u2019re living beyond your means.<\/p>\n 2. Take control:<\/strong> If your expenses match or exceed your income, you will need to try and cut back. The best place to start is with luxuries. Can you cut back on entertainment, reduce your grocery bill by sticking to necessities and cutting out the treats, or car pool to save petrol costs?<\/p>\n Avoid not paying accounts or loans. Not only may this result in penalties, but it will also reflect badly on your credit score.<\/p>\n If you are still having a problem making ends meet after you\u2019ve cut back on non-essentials, speak to creditors and agree a payment plan rather than not paying at all.<\/p>\n 3. Understand interest:<\/strong> Compound interest is interest paid on the original amount of money (whether saved or borrowed), as well as on the interest it has already earned. In other words it accumulates interest on the interest, as well as the original amount.<\/p>\n Here\u2019s an example of how interest at 10 per cent compounds over six months. Based on an original amount of R2 000 the compounded amount after six months is R2 102.10. If you had saved the R2 000 at a 10 per cent compound interest rate you would have made R102.10. If you had borrowed it you would need to pay back the original R2 000 plus R102.10 in interest.<\/p>\n 4. Keep active:<\/strong> Being in control isn\u2019t a once-off budgeting exercise. You have to remain actively committed to managing your financial affairs. Once you\u2019ve worked out what your income and expenses are and have a clear idea of your financial position, you may want to consider how to make managing your money easier. One option is a consolidation loan. Debt consolidation involves using one loan to settle a variety of other debts. The advantages are that it can make debt easier to manage and may improve cash flow.<\/p>\n 5. Have a plan:<\/strong> Once you\u2019ve got yourself on an even financial footing you can start setting goals. Consider where you\u2019d like to be financially in five years\u2019 time and put steps in place to achieve this. Doing this you\u2019ll soon find that you are controlling your finances rather than the other way around.<\/p>\n Whatever the state of your finances, the best thing you can do is get a realistic understanding of where you are, act immediately to take back control and once you have, set some financial goals.<\/p>\n