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Transform your financial future with these five tips from Standard Bank

Among the key actions to managing your finances is budgeting for expenses, paying off debt, and savings and investments

Planning four financials goals, budgeting and saving can help you gain financial freedom.
Planning four financials goals, budgeting and saving can help you gain financial freedom.
Image: Supplied/Standard Bank

The start of a new year is an ideal time to set new financial goals and craft a plan to meet your goals for the year ahead. It is important to plan early so you can put these into action as soon as the year starts.

Having a good understanding of financial matters will make it easier for you to target relevant financial goals and implement a plan that meets those objectives.

“The road to financial freedom requires financial literacy, deciding on a plan that aligns with your goals and, most importantly, implementing the plan. It is important to start as early as possible because as time progresses it becomes easy to lose track of your money matters,” says Faith Mneno, head of emerging markets at Standard Bank.

Mneno offers the following tips for those wanting to get a hold on their finances in 2022:

1. Become financially savvy 

Knowing and understanding your financial choices and options is the first step to your financial wellbeing. With Standard Bank’s WalletWise, you can educate yourself in financial areas relevant to you, which can help fast-track your way to financial freedom. This platform can act as your personal financial adviser, teaching you about money management and providing tips that will improve your financial standing in the short and long run. By staying informed, you can budget better, reduce your debt and save more.

2. Draw up a budget before reaching for your wallet

The core component to managing your finances is budgeting for expenses, paying off debt, and savings and investments. When you prioritise and allocate your funds accordingly, you will meet your monthly commitments and not reach for your wallet unnecessarily. If you are failing to meet these monthly commitments, it might be worthwhile looking at a second stream of income.

3. Become debt free

Instead of splurging on luxury goods and non-essential items, consider using extra money to pay off your loans. Becoming debt free is essential to financial freedom as you can put money that was used to service your debt towards savings and investments that will help you build wealth.

4. Make your money work for you

After taking care of your monthly expenses, it is important to set aside a certain amount for savings and investments. This can be put aside for a big goal like a holiday or education, or it can be set aside for a rainy day where incidental expenses or loss of income occurs unexpectedly. There are many savings options available, and each provides its own advantages. Tax-free savings vehicles have become popular in recent years, offering a tax-free profit on your investment upon withdrawal. If you would like to make use of this savings vehicle, be sure to max out the yearly savings allowance of R36,000, which ends on February 28 each year.

5. Declutter your expenses

Many of us are guilty of having unnecessary debit orders lurking in our accounts. It is a good idea to re-evaluate your fixed monthly expenses on memberships, subscriptions and insurance. There may be memberships and subscriptions that you’re paying for but not using any more. Insurance is another area that needs to be regularly updated according to lifestyle changes.

With these small simple steps, you can transform your financial future and improve your lifestyle, ending off 2022 better than when you started.

This article was paid for by Standard Bank.