Financial Tips for 2022

Because it’s not your salary that makes you rich; it’s your spending habits.

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  • Covid-19 has heavily impacted countries across the world, and South Africa has not been exempt.
  • We have seen massive fuel and electricity increases, as well as higher repo rates and the forever-rising costs of living.
  • Some people hoped desperately for some respite with bonuses and 13th cheques. A few years back that money might have been spent on a fab vacation or some expensive gifts thrown around. But not so much anymore. South Africans are learning ever so much to take a step back and to find out just how they can stretch their money and make every cent work.
  • Today they need financial advice for spending their money wisely for 2022. They are searching for tips to help them through what has been predicted as a rocky path for South Africa’s expected economic growth. Growth is at risk because of softer commodity prices, a deceleration in global demand, rising unemployment problems, and ongoing Omicron concern.

The cost of living is exacerbating even financial assistance programmes

Rob Gwerengwe, CEO of FNB Middle Market says “Consumers have received various concessions over the previous two years to assist them in managing the financial burden of the pandemic. Banks tried to help by extending their financial assistance, and the SARB cut interest rates to record lows, while the government launched financial assistance programmes such as TERS to mitigate the pandemic’s impact.” 

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Some excellent financial tips

Rob Gwerengwe (above) offers the following useful tips to help you start off 2022 on a good financial footing:

It is time, seriously, to live within your means: There is a golden rule when it comes to money management and that has always been to spend less than you earn. If you can live like this, then you won’t be relying on debt to keep up your lifestyle. That means you will need to budget properly so that you are accountable for all your monthly expenses. Some South African financial institutions like FNB offer clients free digital tools on their App so that their customers can manage their money just by clicking on their phone.

Don’t just use your credit because it’s available: You need to be smart about how you manage and use your credit. That way you get more value out of it. Whether you use your credit card or have an overdraft facility with the bank, or make use of a loan, you will need to be smart and compare the various options to ensure you’re paying the least fees, LittleLoans, a South Africa payday loans lender, recommends you only use these types of loans for emergencies as they can be expensive.

You get loyalty rewards and incentives: These rewards can help you to save money. But that means you need to be disciplined about the way you manage your money. Take a look at eBucks Rewards for instance. With them, you can earn or spend your rewards on necessary expenses, for instance, your grocery bill and your fuel. Just see what is necessary to get the benefits.

You need to plan and have money for upcoming or worse, unexpected expenses: No one can ever predict the changes that will occur in the interest rates and the fuel prices, let alone the food prices, which seem to have doubled just in the past year! Sometimes unexpected health problems or accidents happen, and suddenly you need sudden cash. These unpredicted events need to be factored in when planning your finances into the year ahead.

Planning your tax before the tax year closes on February 28th: Think about year-end deductions and retirement plan contributions. Keep your important tax documents and receipts together so your financial planner can offer you good advice such as selling shares, or contributing to retirement accounts, or deferring income, etc. maybe donating to charity for a tax write-off.

Set long-term and short-term goals: When you have specific goals, you are more inclined to save for them, determining how much money you will need to reach your goals.

It is recommended that consumers view 2022 as a year where they recover from the financial shackles of Covid-19 

Two years of the pandemic have made it imperative to start working towards financial prosperity instead of shelving your plans. It won’t be easy because the cost of living has increased so dramatically. But Rob Gwerengwe says that many households have proved to be resilient in the pandemic. 

We can’t escape from the fact that we are in a tough place and have less money now to work with. But by embracing new ways of thinking, and taking small steps at a time, each of us, by following these good financial tips, will be able to say we made 2022 a better financial one because a “big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” – Suze Orman.