Unless you’re living somewhere very far removed and off the grid, money affects all of us every day of our lives. We need it to pay our rent or bond, buy essentials such as food and electricity, pay for petrol or transport – the list goes on! That’s not taking into consideration the things we may rather want to be spending our money on.
Reaching your money goals means taking the time to understand your current financial situation, and you can do this by asking (and being honest with yourself about the answers!) a handful of crucial questions. Let’s take a look at the top 5 money questions you should be asking yourself.
1. Am I managing my finances the best way possible?
Do you know how much money you spend each month on essential and non-essential expenses? If not, and money (or the lack thereof) is a worry for you each month, this is the first thing you need to work out. It’s a big eye-opener, and you’re guaranteed to see where you’re spending the most amount of money, and where you could cut costs.
2. Am I spending my disposable income on things that really matter?
This is, of course, if you have money remaining at the end of each month after you’ve paid or budgeted for the essentials. Is your disposable income being spent on items such as new clothes or entertainment? What about fancy travel? Or maybe you’re stashing it away for a rainy day? Have a think about what and where you’re spending your extra money on, and if it’s adding any real value to your life.
3. Where do I want to be financially 1 year from now?
What are your short-term goals? It could be that you want to have cleared a particular debt, saved up for a study course, or money towards new car tyres or maintenance. Perhaps you’re dreaming of that holiday you’ve wanted to take for so long. No matter the reason for your financial goal, always have one and keep it front of mind with every money decision you make until you reach it.
4. How can I increase my savings in 1 year?
This is where daily “cost cutting” plays a big role. That take away lunch, or quick cup of coffee on the way to work add up without you even realising it. For example, if you’re spending R50 a day on food or snacks, that’s over R 1,000 per month (R12,000 a year) that could be going towards something far more important.
5. What can I do to increase my current income?
If you’re working part time or half days, speak to your employer about the possibility of increasing your hours. If you’re already working full time, is there the option of doing overtime? If you don’t have any regular work, then it’s time to start thinking out the box, because we’re living in the age of the entrepreneur, and opportunity really is all around us. Start by having a think about what you’re good at, and passionate about. Is there a way for you make a living from it, even if it’s something you’re only able to do on the side? You never know, it could be the start of something great!
What other money questions have got you thinking about your financial situation? Why not set aside some time to have a think about these questions, and what the answers mean to you. It’s one of the first things you can do towards understanding your financial situation, and how you can take control of it.
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