The start of the new year comes with its share of contrasting emotions. There’s a sense of anticipation and excitement for what lies in store for us over the next eleven months mixed with some level of anxiety or caution when we start preparing the annual household budget. While the December holiday period gives us time to relax and recharge, the reality of January is for some, a harsh wake-up call.
For those of us with children at school, the list of bills to pay seems endless – uniforms, stationery, books, school bags – in addition to the school, university, or college fees. Provision must be made for all these extra costs that place added pressure to what is often an already stretched budget.
“While all these added budget constraints affect many of us, the ability to start the year on a budget positive note will stand you in good stead for the year ahead,” says Kutlwano Mogatusi, Communications Specialist at WesBank Motor. “Making use of an interactive online tool such as the WesBank budget calculator is extremely helpful to get a realistic overview of your budget.”
As you start the budgeting process for 2023, WesBank has some tips to guide you along this sometimes-tricky financial path. First and foremost, it is important to set up and, as diligently as possible, stick to your monthly budget. This exercise will help you to avoid financial mishaps and bad spending habits.
Next up, estimate both your income and your expenses – how much money do you project to come in each month, and how much needs to go out to cover all your monthly costs. Aim for a positive figure in the credit (income) column, and not a negative figure in the debit (or expenses) column.
Establish a realistic spending limit and try, as far as is possible, to stick to it. If you are able to set aside some money each month as a line item for emergency expenses, it is recommended to do so.
Try to limit your debt on credit cards or loans – servicing debt of any form is expensive money and can spiral out of control if not kept in check. Be aware of unscrupulous money lenders if you need to take out a loan, and make sure you understand the monthly repayments including the interest charged. This money will need to be included in the budget.
Set up debit orders for the essential monthly expenses such as a home loan or rent, vehicle finance, insurances, utility bills, credit card, school or college fees, contracts or subscriptions. Defaulting on monthly repayments negatively impacts your credit score and rating should you need to apply for credit.
Review the food budget – shop for specials but be aware of buying food items that could go to waste because of the increased loadshedding schedules. Determine if you can afford to eat out or order take-aways as these costs add up as extra expenses. Buy what you will eat, and make sure you do eat what you buy.
“When you sit down to plan and create your household budget for 2023, the best starting point is to review your existing budget. Look at your income against your monthly expenses and discretionary spending and realistically see where you can cut back on unnecessary items. It is easy to get caught up in confusing what is necessary against a want or nice to have. Tough choices may need to be made, but these will assist you to come out on the positive side of your budget in the long term. Happy budgeting!” concludes Mogatusi.
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