By: Tshepo Mathato

With the new year under way, everyone is predictably making money resolutions with the hope that they will see them through.

According to the 2023 Household Financial Wellness Index by Momentum and Unisa, many South Africans sadly overestimate their levels of financial literacy.

In a sample of almost 20 million South Africans, 45.7% self-assessed as being financially literate whereas according to the survey’s criteria, only 15% demonstrated a sound grasp of financial concepts.

Furthermore, although 54.3% felt that they weren’t financially literate, in fact as many as 85% scored low on the financial literacy scale.

This shows the importance of sound financial management. Here are some tips to take you into the new year and beyond:

Remember that financial success is a journey, but you can’t undertake a journey if you don’t know where you’re going.

So, setting goals is very important. The first thing to do is to identify what your ultimate goal is, where you want to be financially and in what time frame.

Face some uncomfortable truths

It is important to indulge in honest self-introspection and ask yourself some uncomfortable questions about your current financial reality. It is only through answering these tough questions that you will be able to set new goals.

Focus on goals that will set you up for success.

Set a realistic budget and make sure that you stick to it.

Set aside an amount each month for your savings (it doesn’t have to be a lot but start getting into the discipline because it will help you learn the rewards of saving).

Repaying debt consistently, and on time is important – Start with a debt repayment plan for every month to ensure that your debts are always paid. This will also help protect your credit record, which will be important for other future goals.

Retirement – Many people start thinking seriously about retirement when it’s too late, always make sure that this is part of any financial plan and the earlier you start, the better.

Live within your means and always look for ways to trim your expenses.

If you are looking to find extra money in your budget, you can always go back to some of these hacks: cutting out take away coffees, cutting out take-away means (especially work lunches which should be made at home) or reducing entertainment costs. Additionally, think about buying in bulk whether by yourself or with others (the prices are always cheaper) and always compare prices of products at various stores (the internet and apps are very useful in this regard).

Where possible, pay a little extra into your mortgage bond each month.

This is long-held sage advice because by putting in a little more into your bond each month you reduce the interest and payment period of your home and leap into financial freedom a lot sooner.

Bring your family on board.

Make sure that your family is aligned with any cost-cutting strategies that you introduce and make sure that everyone understands and sticks to the plan.

Practise what you preach.

If you want your family and your children to stay the course, you have to do the same. Stay disciplined and strong-willed.

Get a financial advisor

Even the most talented soccer players can only go so far without a team of coaches, nutritionists, and a psychologist. An expert can help you stick to your plan and enhance what you are trying to do.

* Mathato is the corporate retirement benefit counsellor and Financial Coach.

PERSONAL FINANCE