By Silindile Ngubo
Lockdown has opened many opportunities for self-reflection, and looking back on my financial journey, I’ve certainly made some mistakes. Fortunately, however, maturity, my background and working in the financial services industry has taught me many valuable lessons that have helped me to also make a number of good decisions. And as we celebrate Women’s Month, I believe that it’s also particularly important as women to also take the time to recognise and celebrate our own achievements.
With this in mind, I’ve drawn up a list of three of my greatest financial wins in the hopes of inspiring and motivating others:
- Creating a budget
If you don’t already have a budget in place, the process of creating one can seem like a lot of unnecessary work. But I can’t stress enough how creating a budget has helped me to stay in control of my finances.
Having a budget in place, and taking a careful look at where I am spending has helped me to identify and cut back on a number of unnecessary expenses that were eating into my income. Additionally, by doing some research on some of these expenses, I’ve been able to renegotiate fees with various service providers to cut down on my monthly costs. Specifically, I was able to reduce my car insurance premiums and lower the interest rate on my credit card. I was then able to allocate more money to saving and investing instead.
A young cousin of mine, who completed his law degree just last year, recently told me how he created a budget for himself while he was at university as well. He also noted how much this had helped him to “stay within his lane” or live within his means.
He was certainly smarter about managing his finances at university than I was, but this emphasises again how useful a tool a budget can be at any life stage. Believe me, it is well worth the effort.
- Creating – and achieving – some of my 2020 financial goals:
At the beginning of the year, after carefully examining my budget to see what I could realistically achieve, I decided to create a list of three financial goals. Each of these was a short-term goal with a three to six-month timeline, and a specific, measurable outcome to aim for within that period. Some examples of these were saving towards repairs around my home and making some home improvements.
Achieving my first goal was so uplifting and inspiring – I could see that I had really accomplished something, and there is no greater feeling. It was even better than “just” saving, because there was a purpose and meaning to each goal I had set.
In fact, while having short-term goals has certainly been a great place to start, achieving my aims has motivated me to create more goals that are slightly more long-term, or that I would like to work towards over the next five and even ten years.
- Using the opportunity to save money on my home loan:
This year has certainly been challenging for the country, and the South African Reserve Bank has cut interest rates by 3% since the beginning of the year in order to support the economy and households through the pandemic and lockdown.
When the first rate cut was announced, I made the decision to keep repaying exactly the same amount of money towards my mortgage each month as I was before. With the reduction in interest rates, this meant that I was essentially putting extra money towards my home loan even though the monthly payments stayed the same on paper. By putting extra money into my bond, I know that I will pay a great deal less in interest over the life of the loan, and that I will be able to repay my home loan much sooner.
Additionally, the lockdown meant that I was able to cut back on my travelling expenses, and I made a point to allocate some of these funds towards repaying debt and boosting my savings for my financial goals. I am constantly looking for ways to cut back on my expenses so that I can allocate these savings towards my financial goals instead – in this way, I’m able to achieve and track my financial wins, and stay motivated to maintain my financial discipline.
Times are tough, but I hope that this list reminds other women to take a moment to recognise their own achievements, and inspires and motivates them on their own financial journeys.
Silindile Ngubo is a Fund Accountant at Cannon Asset Managers
PERSONAL FINANCE