By Sherole Webster & Solly Maanaso

As a new member to the Finance Department at TIC, Solly Maanaso has always had an interest in Accounting. He was motivated to achieve the highest qualification in the field to assist him to transform his community.

Solly studied towards his Accounting Degree at the University of Limpopo. After being identified as one of the top achievers from a group of 20 top achievers selected to study B Compt., he was awarded a bursary by SAICA and SizweNtasluba VSP to complete his CTAs. Coming from a previously disadvantage background taught him the importance of hard work, excellence and humility. He started his working career at SizweNtsaluba VSP. Solly has also worked for some of the leading banks in the country as well as in the mining industry.

Being qualified CA with more than 10 years in financial, audit and accounting experience, Solly has now taken up the position of Group Reporting Manager. He shares some of his top tips for effective personal budgeting. It may prove beneficial to implement some of these tips to work towards a financially sound 2016.
1. Cut your bank fees, unnecessary credit cards and clothing accounts
Many of the retail banks have started to reduce the cost of running a current account, so shop around and find the best account for your needs.
While you’re at it, check your bank statements and tally all of your regular payments. You may not need some of the goods or services you’re paying for (do you really need that gym contract you never use?) and, for the items you do want, you may be able to get the same goods or services cheaper elsewhere.

2. Prioritise and pay off debts
Compiling a list of your debts from most expensive (high interest rates) to least expensive. You can then put any extra money you can muster into paying off high-interest debts while making minimum repayments on debts with lower interest rates and gradually work your way down your list. Short-term debt such as credit cards, clothing accounts and vehicles will likely top this list, while long-term debt such as bonds will come later.
3. Consider paying with cash
Credit card rewards can work to your benefit, but if you’re having trouble sticking to a budget, consider paying with cash. The old-fashioned envelope system will force you to stick within the spending parameters you’ve established. Delegate a certain amount of money to each spending category like groceries and entertainment, when the cash is gone, that’s it! No plastic payments.

4. Don’t give in to pressure
Whether it is pressure from the kids to buy takeaways every Friday or social pressures to have nice clothes and/or a nice car, don’t give in to it. You know what you can and can’t afford. Rather wear the same pair of shoes to work every day than not have a savings account or any money in the bank halfway through the month.

5. Don’t live to your means
So often a big mistake we make is to live to our means. You might already be planning what you are going to do with your annual increase this year – stop that right now! You have to have leeway for the emergencies and it doesn’t help to live a lush lifestyle if you are spending every cent you earn to maintain it.

6. Think small and see big results
Little savings add up, so trim the family budget anywhere you can, no matter how minimal it may seem. Start using five, R1 off grocery coupons each week on things you already buy like cereal, meat, and fruits. If you are working hard to save, but your spouse is spending excessively and in debt, your budget won’t make much sense. As far as possible plan together for the family’s goals so that a plan can be put in place to work towards achieving them. If the entire family shares the responsibility for the budget, everyone can cut back just a little and make a big difference.

7. Increase direct deposit to savings
If you have a portion of each paycheck deposited directly into savings, then up that amount by one percent, little enough that you probably won’t notice, but big enough to make a difference. Your goal should be to save at least 10% of your pre-tax earnings. Consider paying yourself first by starting a regular savings plan that could form the backbone of a fund from which you will be able to draw money to cover the necessities of life. Whether you are saving for a major purchase or for your retirement, you will never reach your goals unless you make savings a priority. Little changes can add up to big savings on expenses. Those savings can be put to good use for achieving your long term savings goals.

8. Be realistic
A successful budget is both accurate and realistic. There’s no sense in deluding yourself into thinking you’ll be able to cut costs in certain areas if you’ve consistently failed to do so in the past. If, for example, your monthly grocery bills tend to hit the R600 mark, then you’ll be doing yourself a disservice by budgeting R300 a month for food. Your budget needs to truthfully reflect your lifestyle, and if your circumstances are about to change, so, will your costs.

9. Keep a record of everything
Establishing a sustainable budget means keeping tabs on your spending, and this is something you should plan to do on an ongoing basis. Get into the habit of saving or recording your bills and receipts and comparing your totals to the various amounts you’ve allocated in your budget.

10. Stick to the budget
The hardest part of budgeting is sticking to the budget; many find it easy to set up their budget but fail when it comes to living within it. Remember, you are the only one that can maintain a budget, so it should be tailored to your needs, your values and your priorities. Be flexible; remember that life is unpredictable; when you make a budget, try to allow for some unexpected expenses. And, be gentle with yourself if you go over your budget sometimes. You will make mistakes but don’t be too hard on yourself.

*Bonus. Look towards the future
In order to avoid falling off the path of financial discipline, you should set out clear long-term goals to keep in your mind’s eye as you make decisions throughout the year. Putting goals in place such as saving towards a child’s education, a home or retirement will help you stay focussed and prevent you from being tempted off your path by spending unnecessarily.

Turn savings into a game. Instead of force feeding budgeting tips to yourself, look at this as an adventure. Try to top your own savings each month or compete with a friend. Make savings a family affair – have a fun programme of savings for everyone to enjoy. But importantly, in Solly’s words,
“Keep things simple and straightforward.”