Four tips to keep financially fit

Johannesburg – Summer’s here and the number of panting joggers, lycra- wrapped cyclists and cars in the gym parking lot suggest that plenty of us are working hard to lose a bit of lockdown flab before we hit the beach.

Given the financial impact of the past eight months on just about everyone, it’s also a good time to think about your financial fitness, says Nokulunga Mthembu, product owner for Pulse, a credit rating platform from financial services provider DirectAxis.

“Just as getting back into physical shape after the lockdown will provide long-term health benefits, a good financial workout will get you ready for the festive season and the year ahead and will literally pay dividends over time,” says Mthembu.

Another reason now is a good time to assess your financial fitness is that you may have had to make salary sacrifices and won’t be able to rely on an annual performance or Christmas bonus.

To carry on living the same lifestyle with less money is the financial equivalent of eating poorly, drinking and smoking and ignoring health risks.

Here are four tips to improve your financial wellness:

Set some goals

Some financial experts recommend the 50/ 30/ 20 rule as a guide on how to prioritise your spending. It suggests using 50% of your income on essentials such as food, rent or paying your bond, spending 30% on discretionary expenses such as clothing and entertainment and then saving or investing the remaining 20%. “While this isn’t possible for everyone, particularly given the circumstances in which may of us now find ourselves, consider it as a guide, something to strive towards.

Get financially literate

Start by finding out more about things that affect your dayto- day financial affairs. For example, understanding insurance, getting the most from your medical aid or reducing your cellphone costs.

Spend less than you earn

By budgeting and keeping tabs on your expenses you may be able to save some money each month. Ideally try to ringfence this. A tax-free savings account is one option and should help to avoid the temptation of spending it. Another tip is to put your savings on autopilot by having a fixed amount automatically paid into a savings or investment account via a stop order. You’ll be surprised how quickly it builds up.

Track your progress

A good way to keep track is by regularly checking your credit score. There are plenty of free tools that allow you to do this, including www.directaxis. In addition, it suggests ways to improve your score.

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