5 ways to manage your money and stop financial anxiety
Price hikes can put a lot of pressure on consumers, and the stress of living from pay-check to pay-check can lead to financial anxiety. Picture: DragenZigic/Freepik
Increases in fuel prices, inflation, interest rates and food prices have resulted in people keeping a closer eye on their finances.
However, these price hikes can put a lot of pressure on consumers and the stress from living pay-check to pay-check can lead to financial anxiety.
Financial anxiety can lead to people feeling nervous or on edge when interacting or thinking about money, which can impact their relationship with finance.
Instead of letting financial anxiety get the better of you, take steps stop it.
Dhashni Naidoo, FNB’s consumer education programme manager, shares five tips to reduce your financial anxiety:
1. Review your budget
It is important to write down all your income and expenses so you can start planning how to spend your money. An essential step in budgeting is to look at non-essential or luxury expenses and see how you can cut down your spending on these items.
You should always strive to have a budget where you are spending less than you earn.
2. Be proactive about managing your debt
Manage your debts by paying a little extra towards your debt each month, and paying off debts with higher interest rates sooner. You can contact the service provider if you are having trouble making repayments.
3. Start saving for an emergency fund
An emergency fund can be useful for a rainy day or loss of income. You can start small and then slowly increase the amount you put away. To make the process of saving easier, you can try to automate savings so your money moves to a savings account on pay day.
Naidoo said, “It is advisable to save between one to three months’ of your monthly expenses.”
4. Join a stokvel or get a saving buddy
Stokvels or a savings buddy are great ways of saving money and they can help you develop the discipline needed to continue the practice of saving.
5. Invest for the long term
Speak to your bank or a financial adviser on how you can make long-term investments.
You may need to consider different investment products such as a tax-free savings or shares, exchange traded notes (ETNs), fixed deposits, property or retirement annuities. It is important to get as much information as possible about the investment products to develop an understanding of how they can help you plan for the future.