There’s a point in each month, barely two weeks in, where collective anxieties start to bubble over where our money went and how. There are hilarious, devastating, and relatable Tweets, Facebook statuses and digital imprints of these accounts – we feel united in our struggle against strained cash flow, data costs and living expenses. If there’s one thing South Africans can do, it’s laugh the problem off until it becomes bearable to face, but with financial literacy in South Africa being one of the lowest in the world, when is it time to stop laughing and start doing something about it?
The Financial Services Board of South Africa did a survey to see how financially savvy South Africans really are. We’re at a rate where just over half of our population, 51% to be exact, knows the ins and outs of being financially responsible but that isn’t saying much. In a related study, statistics found by the Financial Services Board and the Organisation for Economic Co-operation and Development (OECD), who surveyed 50,000 people in 30 countries, including 2,813 South Africans aged between 18 and 79, found that only 30% of us are financially knowledgeable in comparison to the rest of the world. So clearly, it’s a bit of a crisis.
How do we define being financially aware? This all boils down to knowing how you’re spending, what you’re spending your money on, and what that looks like in a way that you can understand and track throughout the month. Being informed about your choices doesn’t require university degrees or a background in economics – it’s a way of becoming financially responsible through understanding where you’re at and where you need to go. The attitude of a lot of South Africans, including myself until I decided to put my skills to the test, is that you have to make large sums of money with a bond to make a budget because if you’re not making money then, what’s the point? That attitude is ultimately our downfall – it doesn’t matter how much you make, be it from side hustles to pocket money, if you have even a little bit of money, then you have to learn how to manage it properly.
Easy? Not even a little bit. The problem goes by many names – student debt, loans, bonds, and supporting family members that leave a lot of us living beyond our means without knowing what we can do to control our spending habits. The high levels of unemployment and a lack of access to opportunities to make sustainable income can add a lump sum to our worries.
It may seem like a mess, especially if you don’t have a steady stream of income, caring about how you spend can seem like a waste of time. But it only takes small changes in your behaviours to ensure you have the right goals and mindset in place for when you’re dealing with the big responsibilities later in life.
Here are solutions for keeping your cheque in check:
1. Budget
If you’re like me, and even basic maths makes your brain switch off, try budgeting in a way that makes sense to you. If you’re more visual, try seeing your finances as a giant cake or pie that you slice into. If you want to see your money as colourful graphs or round pebbles that represent what’s coming in or out, do that. The point is to make a list of what you’re earning and what you’re spending, and see if that list makes sense and what can be adjusted or tuned to fit your needs.
2. Goals
Goals are a great way to work towards something. It’s no use saving when you don’t know what it is you’re saving for, and it can be demotivating when you feel pressure to blindly save but you don’t make enough money to make those realities happen. Write out your goals and jot down the aspirations you want to achieve, whether it be buying a cell-phone for yourself or starting a small, simply entrepreneurial idea with your friends. Even if you don’t meet your goal or you wobble on the way, setting goals is a nice way of knowing that you have time to achieve.
3. Discipline
This is probably the toughest part. But this isn’t about punishing yourself or being unrealistic about your financial situation. If you’re like me, you have a literal addiction to sugar. This means I have to fix in custard doughnuts and Lemon Twist into my budget but then when the money supply has run out for those things, I need to not let temptation make me live beyond my means. It’s a hard pill to swallow but you and your wallet will thank you for it.
What does being financially responsible mean to you? Let me know what your tips are for managing your money in the comments below.