Research has found that South Africans begin to budget for household expenses only once their finances are out of control.
However, experts advise them to start making changes now.
More than 60% of average South African shoppers admitted to visiting 19 stores a month and indulging in impulse buying.
The international marketing and research company, ACNielson, found that for every R100 spent on groceries R16 was spent on alcohol.
The chief executive for MortgageSA, Saul Geffen, said January was a good time to take control of unruly household expenses.
Geffen said the home loan originator advised consumers to pay money into investments first to accumulate wealth rather than just trying to keep up with the monthly expenses treadmill.
He said that urgent monthly household bills easily led to current and not future budget planning.
“Before you pay any bills, set aside a certain amount every month into an investment that cannot be easily accessed or changed.
“Most households are aware of [how much] money is coming into the house every month, but many have no idea where it is going.
“This becomes a very dangerous financial position in which to find yourself.”
Geffen said consumers should go through their fixed monthly household expenses such as mortgage payments, insurance, telephone and Internet costs and car repayments. He added that paying for all the fluctuating expenses was one of the hardest aspects of budget management and advised consumers to keep all their receipts for at least two months, including items paid for in cash.
“Calculate all your monthly expenses against your total monthly income and hopefully, it should be above zero.
“Even if it is well above zero most households will be shocked at the amount of unnecessary money their household is haemorrhaging.
“Once this is completed, set up a reasonable budget [that] makes provision for each of the [expense] categories.
“The more specific the category the more control you will have over your budget.”
Article via I-Net-Bridge
