Being smart about your money requires a lot of discipline.

You cannot continue to overspend unnecessarily and think that you will still have a secure financial future.

Wikus Olivier, managing director at CreditSmart Financial Services, urges that you be proactive when it comes to your personal financial situation and approach.

“By adjusting your budget accordingly and implementing the required steadfast discipline along your financial way, you can ensure yourself money mastery success even when having to deal with some changes and disruptions during your journey.

“You may not be able to prevent events and external decision-made implications from happening, but it is crucial to keep tabs on your personal money management. Be strict not to exceed your financial boundaries, regularly overlook your situation, and tweak your budget to try and leave some room to best deal with financial changes that come your way and affect your cash flow,” says Olivier.

Olivier shares tips to help you take on a disciplined budgeting approach:

Assess your current financial state: Download your last three months’ bank statements and put your inspector hat on. Review your income amount, various expenses, debts, and savings or investments to identify your current reality and certain areas for urgent improvement. 

You can also download your credit score from a reputable platform (for free each year according to the law) or do a debt-to-income ratio (DTI) calculation to see where you are at: Your total debt amount (all your debts added up), divided by your gross salary (amount before deductions) multiplied by 100 will indicate your DTI percentage.

TIP: If the calculated percentage is above 40% you must seek ways to improve your financial standing and lower your debt. If it is above 60% you are experiencing a big red flag and can ten to one be classified as being over-indebted. Seek and implement an ideal solution that can help improve your situation and current standing.

Create a realistic budget outline and adjust it as needed: List, amend, and refine your budget each month according to your various responsibilities and the financial changes that may occur. Search for useful educational material and an available, easy-to-use template or app that can work for you (if you are not using a helpful tool already). As a start, don’t wait – set up a simplistic budget outline and fill in your personal-picture-portrayal gaps:

Take your “money in”/net salary amount (income after deductions) and include/add any extra income amounts like commission, rent, if you are a homeowner, or your side-hustle boost amount to your “money in” total and minus “money out”/expenses (various debts or obligations, service agreements, and living costs, for example). From that you also minus money for savings (short-term savings, an emergency fund, or long-term savings like investments and annuities – note, not included in your net salary already). This equals a surplus or minus total.

TIP: If the calculated amount reflects a surplus (+) amount, you can pay off your debt (bit by bit) or add to your emergency fund and other saving initiatives. But if the amount reflects a minus (–) you need to be proactive and identify as well as deal with the problem. Don’t forget to always try and implement ways to lower your debt.

Regularly check in with your accountability partner via a budget meeting: Appoint someone reliable in your circle to support and keep you responsible concerning your budget, spending and other financial habits. This is a key initiative to help you improve your behaviour and reach your money goals. Have a check-in every month (or second month) and enjoy your involvement and commitment. This can be a big win towards a sound financial future. 

Endure, stay disciplined and make your way through financial changes: Apart from trying high and low to stick to your disciplined budgeting habits or money management approach, think resilience and remind yourself that you can succeed even when curveballs (for example, a money-reliant emergency, interest rate increase, fuel price hike or grocery price change) creeps in to disrupt your set-out plan.

Try to stay positive and proactive – go back to the drawing board and see what you can change within your budget. Take an intentional look at what else you can do to up your money or lower your debt and unnecessary spending (for example, cutting subscriptions or those ‘spending leaks’) instead. If you have no choice – ask registered and preferred professionals to walk the walk alongside you to support your journey.

Change and how you deal with the change [or challenge] are equally important. But having the support that goes along with these tasks, may just be the game-changer that you require to successfully achieve true money mastery.

“Explore the above recommendations as you continue your year and journey, to not only master your money situation but to also stay resilient when dealing with various challenges that may affect your budget and financial situation,” says Olivier.

mashabas@sowetan.co.za