Many South Africans are actively seeking ways to improve their financial well-being.
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As you celebrate the start of the new year, taking steps towards financial wellbeing can help you achieve a more secure and prosperous 2025, according to Ans Gerber, Head of Data Insights, Experian.
Last year, the South African economy presented a mixed bag.
According to Experian’s Q3 Consumer Default Index, inflation cooled slightly to 3.8% in September, but the cost of living remained a significant concern, having everyday expenses including food, fuel and electricity in particular. Interest rates, though down slightly from their peak, continued to impact household budgets.
"Many South Africans are actively seeking ways to improve their financial wellbeing, turning to side hustles and embracing the gig economy as a testament to their resilience in the face of economic challenges. This proactive, entrepreneurial spirit is a powerful asset," Gerber said.
"We know that financial situations vary widely among individuals, but if you're among those striving for financial betterment, you’re in the right place."
Here are five ways to help you take control of your finances and build a more secure future.
A budget is not about restriction, it's all about understanding where your money goes and highlighting where you can adjust.
Cutting back on regular takeaway meals, looking for more affordable entertainment options, or exploring cheaper mobile data plans can also free up your funds over time.
Think of it as pro-actively telling your money where to go, rather than wondering afterwards where your money went.
Managing your debt is important due to the high interest rates. Explore options to consolidate high-interest debt like credit card balances, into a lower-interest personal loan.
If you are struggling with debt, you should consider contacting your creditors to discuss possible payment arrangements. Create a list of your debts and then propose a realistic payment plan.
Don't hesitate to reach out to your credit providers, they may be willing to work with you.
Small, regular contributions to a savings account or an emergency fund can give you a financial buffer against a financial crisis or unexpected expenses.
Aim to have a savings account or an emergency fund that covers three to six months of essential living expenses.
"This safety net not only provides financial security but also peace of mind, reducing stress related to unforeseen financial challenges brought on by loss of work or illness," Gerber said.
"Contributing to a dedicated savings account will make it easier for you to track your progress and avoid dipping into it for non-emergency expenses."
In a competitive credit market, where loan approvals are becoming more stringent, a healthy credit score is crucial.
Dispute any errors on your credit report and take steps to improve your score by paying your bills on time and manage your credit utilisation (the amount of available credit you are using).
"Once you have a handle on your budget and debt, and have established a solid emergency fund, you can explore different ways to grow your savings account with a higher interest rate, exploring different savings options offered by your bank, or researching government-backed savings programmes," Gerber said.
The key is to find a savings strategy that is in line with your financial goals as well as risk tolerance, and remember that even small, regular contributions can add up significantly over time.
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