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Personal budget for a better future - key areas likely to change

By Winnie Kunene | Mar 05, 2016 | COMMENTS [ 0 ]

A good life doesn't just come from nowhere - it is desired, planned and budgeted for.

When Finance Minister Pravin Gordhan delivered his budget speech a week ago, you could see that he had taken into consideration many social and political factors affecting the future of the country's economy.

For government, creating a budget isn't just about working out how much there is to spend and trying to cut costs - it's also about trying to work out what might happen in the near future, and plan for that.

So it should be with our personal budgets. We shouldn't just look at how much we usually spend and try to find ways to spend less. Instead, we should look at what life changes we are likely to make in the coming year or two and start planning financially for whatever is coming our way.

Here are some of the main things that might change in the different areas of our lives in the short or medium term that we should consider every year.

The Department of Home Affairs

Keeping a home - whether you rent it, pay a bond or just maintain it - is probably one of your biggest annual costs. Are you going to be staying in your current home as it is for the foreseeable future, or do you need to make alterations, renovate or move?

You might lose a house mate or gain a boyfriend. Do you need to be closer to work, or further away from your in-laws? Start looking at the costs of any changes you have planned so you can start saving for them, and don't come up short when the time comes.

The Department of Internal Relations

Your family has the greatest impact on your life and your finances. Consider whether there are any changes to your family dynamics on the horizon. Will you downscale and go back home, or will your elderly parents move in with you?

Are you planning a baby or will you need to help out an aunt whose husband has recently passed away? All these milestones will have an impact on your finances, so start planning now.

The Department of Education

Closely tied to the previous budget item, education is one of the biggest costs for families in SA at the moment.

Will your children be starting or changing schools in the next couple of years. Is there enough room in your budget for fee increase? Have you started saving for textbooks, uniforms, outings or even iPads that are required by their schools? Are you planning to develop yourself and at what cost?

The Department of Labour

Your job affects how much you earn, how much you spend and where you travel to and from every day. Any changes in your employment, whether you get a promotion, change locations, leave the company or open your own business will have a massive impact on your finances.

The Department of Transport

Are you intending to buy a new car in the next year or two? Or might you trade in the expensive car that you bought on hire-purchase for something more sensible? Is there a new public transport route in your area that you could use to reduce your petrol bill? Might your employer require you to travel more or less in the coming year? All these factors will affect your budget.

The Department of Health

If you have medical aid, you should consider whether the plan you are on is the right one for you every year. Keep track of your medical expenses.

Also be sure to plan for any medical expenses - like dental treatment or annual screening procedures - that may not be covered by your medical aid.

The Department of Finance

Consider your debt. Get rid of it faster by paying more. Remember that the more you can save and the less debt you take on, the better your financial situation will be, so start saving now.



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