Just a few years ago, it was revealed that 77% of South Africans have no funds left at the end of the month. More worrying was the fact that the average South African was saddled with R70 000 in debt, according to 2015 findings from Debt Rescue. Years later, it’s been reported that as interest rates continue to rise, South Africans are using 65% of their net income to service debt. 

These are tough figures to swallow. But it’s a new year and there’s very little point in going with such a challenging flow. It’s entirely possible for South Africans to make smart financial decisions that will help them break free of debt and achieve long-term financial stability and success.  

In this article, we’ll share the top 10 financial tips for South Africa in 2024. 

Educate Yourself 

Financial literacy is your strongest tool to changing your financial circumstances, and all it boils down to is investing your time. Spend time learning about personal finance and understanding key financial concepts, like budgeting, saving, investing, and debt management. With the numerous resources available, including books, online courses, and workshops, you’ll be able to make informed, strategic financial decisions. 

Have Goals, Create A Budget 

There’s a reason this tip has made it to every financial tips list year-on-year, and that’s because a budget is a fundamental tool for managing your finances. It helps you track your expenses, prioritise your spending, and ensure that your financial decisions align with your goals. 

Make this your year to plan achievable financial goals and create a budget that serves these goals. 

Be Specific About Your Goals 

We’ve spoken about creating goals, but what does this look like in 2024? This is the year of vision and hope, and what this looks like to you is very personal. For some, it’s about having the finances available to endure setbacks, so a main goal in this respect would be to have a thriving emergency fund. 

For others, it’s about reducing your debt and so for this year, your goal would be to pay off a set percentage of your overall debt. 

Seek Professional Advice 

While it’s good to understand your finances and be in a position to make informed decisions around debt management and growing your personal wealth, we will concede that working with a financial advisor who specialises in South African financial markets can help you create a comprehensive financial plan, review your investments, and provide guidance on tax planning and estate planning.  

If you’ve never sought professional advice to make informed financial decisions, this is your year to take your finances to the next level. 

Consider The Consequences 

Most of us know that the financial decisions we make on a daily basis will shape what the end of our month looks like. Take the flat white and muffin that you pick up on the way to work every morning. This could easily come to R70 a day, which is roughly R1400 at the end of an average month (five days over four weeks). Even if you skip a few, that’s still around R1000 on breakfast, which is a lot compared to what you’d spend on making coffee and breakfast at home. 

The point is that everything you’re swiping or tapping for has an impact, whether it’s part of your routine or an impulse buy. There are long-term consequences to your financial decisions, so when you’re considering something new or just want to add a small spoil, like a cup of coffee for your daily runaround, think about your financial goals and whether this is serving them.  

Avoid The Common Pitfalls 

A lot of the time, the difference between struggling and coming through the month without resorting to eating dust bunnies from behind the couch is simply not making unwise choices. 

Here are a few common financial mistakes to avoid: 

• You don’t have a budget and just spend until the money runs out. 
• Misusing credit cards (like using them for impulse purchases). 
• Ignoring your debt and letting it increase every month.  
• Excessive and frivolous spending.  
• Never-ending payments.  
• Living on borrowed money. 

Build An Emergency Fund 

An emergency fund provides a safety net and can prevent you from falling into debt during unexpected financial emergencies. This is your year to build an emergency fund that can cover three to six months’ worth of living expenses, so that if something unprecedented happens (like that pandemic we didn’t see coming), you have the funds to make it through. 

Manage Debt Wisely 

Managing debt wisely is crucial for achieving financial stability. What this translates to, is avoiding taking on excessive or high-interest debt without a clear repayment strategy.  

Invest In Your Retirement 

The reality is that many people in South Africa don’t adequately plan and save for their retirement, which can lead to financial difficulties later in life. This is where a financial advisor is particularly useful and can help you invest in your retirement and plan for your future financial needs. 

Stay Informed 

It’s one thing to pick up a few tips and then use those to your advantage, but the reality is that we need to stay informed about the latest financial news and trends in South Africa. This can help you make informed financial decisions and adjust your financial strategy as needed. 

By following these top 10 financial tips for South Africa in 2024, individuals can work towards achieving long-term financial stability and success. Remember, financial literacy is an ongoing process, so educate yourself and stay proactive in managing your finances.  

Don’t forget that in addition to our Personal Loan Calculator, AA Inform is home to vital financial advice, financial calculators, and even car and home insurance quotes for you to compare.