Spring is not just the time to spring clean your home but it is also the perfect time to reassess your financial health, clear out the clutter and get your financial affairs in order before the end of the year.
Sanlam research found that more than 80% of South Africans experience stress when managing their personal finances while only 35% of them have faith in their abilities to manage their money, with just 17% feeling content about their current financial situation.
According to Mariné van Brakel, Deputy CEO, RCS, these findings mean that many South Africans relate to needing a financial spring clean to make their money work harder and to build their confidence to make smarter financial decisions.
Here are five areas you need to check in on:
Budget
A solid budget is the foundation of smart money management therefore your first step in a financial spring clean should be reviewing your monthly budget.
The first step is to start reflecting on the first eight months of the year including: Where has your money gone? Have you saved regularly? Are you living within your means? Has your income changed?
Armed with this insight, you will be able to make informed choices about where to cut unnecessary expenses, automating savings and adjusting financial goals.
Credit health
The process of your financial spring cleaning is the perfect time to check your credit score. Monitoring your credit score will help you service your debt diligently, using credit responsibly and catching any errors early on.
According to Ans Gerber, head of Data Insights, Experian Africa, South Africans have the right to a free credit report every 12 months from any credit bureau in the country as mandated by the National Credit Regulator and the National Credit Act.
Van Brakel said that requesting the report won’t affect your credit rating in any negative way.
Refresh your fraud safeguards
South Africans are falling prey to financial fraudsters who are trying to rob them of their hard-earned money
People need to remember to always do these three important checks to avoid falling victim to fraud:
1. The domain used by any company sending you an email should be linked to the company rather than from Gmail, Yahoo or Outlook.
2. The number used by anyone contacting you with an offer should be linked to a business call centre, rather than a personal line.
3. The language used should be free of spelling errors and bad grammar.
Time to consolidate
An important step of spring cleaning is de-cluttering and the same applies to financial spring cleaning. The best way to de-clutter is to consolidate your accounts.
“If you have multiple credit accounts (for clothing, groceries, luxury items or electronics for example), you could save on account and transaction fees by getting an account that provides access to many different outlets using one credit facility,” van Brakel said.
It crucial that you have a clear understanding of the fees associated with your accounts and how to avoid unnecessary charges like late payment penalties or collections fees, by ensuring your instalments are paid on time.
Financial literacy
Don’t rely on friends and family for advice to make good financial decisions. Instead empower yourself by investing in your financial education.
You could also enroll in a free financial management course, attend a workshop or you reach out to an advisor. You can research online financial topics you need to learn more about. When it comes to money matters, knowledge really is power.
Have you got a will?
Other than the start of Spring, September also marks National Wills Month.
Passing away without a will could result in legal disputes, leaving your loved ones behind without clarity on how to distribute your assets.
Now is the time to get your will drafted or make sure your current one is still up to date.
According to van Brakel, people should explore online resources for reputable law firms or financial services companies that provide free will-drafting services.
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