How having a budget is like having a life raft for your household

Johannesburg – The year 2020 is gone but its impact on household finances will be present for the foreseeable future.

Regardless of your financial situation, if you went a little overboard with spending over the holidays, you can still get back on track.

Momentum financial planner Janine Horn warns that the road to recovery off the back of a tough 2020 is going to be hard for households. Horn shares some tips on how to get some momentum back on your journey to success with these financial staples.


Horn says budgeting is like the dieting of the financial world – everyone knows they need to do it but not everyone is willing to commit. “January is the month in which most households tend to begin the budgeting process. With the economic crunch, this is the year for all of us to get serious about our household budgets and commit as it is likely going to be a life raft for your household in the year to come.”

Horn advises individuals and households to follow these four simple steps when planning the year’s budget. First, determine your income.

Second, be hard on yourself and cut the fat of things you don’t need.

Third, put more money into paying back debt if possible. Fourth and most important, keep doing your budget every month to track your spending.


When it comes to household finances, Horn says debt is the enemy of success. According to the 2020 Momentum/Unisa Consumer Financial Vulnerability Index, debt-servicing vulnerability also declined as the index score increased to 40.8 points in the third quarter of 2020 from 32.1 points in the second quarter of 2020.

This means that households have been able to pay off their debt thanks to lower interest rates and flexible payment plans. SAVE FOR A RAINY DAY It’s important to save for emergencies. There are 100 000 things that can go wrong when we least expect it – from a car breakdown, robbery to a bed-bug infestations.

Many of these disasters come at a massive cost and not everything will be covered by insurance (if you even have insurance).


As we are all embarking on our personal journeys to success, Horn says it’s up to us to take responsibility.


It may seem far away or less of a priority right now, but before you know it, it will be Easter holidays and you want to be ready. Horn advises that you think about the costs attached to your plans and start a savings account soon.

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