Why Personal Finance Management Will Prevent Your Debt Crisis?

Mar 07, 2016

Why will personal finance management prevent your personal debt crisis in 2016?

The doom prophets are it again, showering the everyday South African citizen with a message of debt crisis doom in 2016.

The reality is, it's not only doom prophecies. It is an honest reflection of many of the everyday South African's spending habits that have as a whole (with quite a bit of help from the government) toppled us into a difficult economic outlook to the year of 2016.

Yet, not all people in this country have a negative outlook on the year. There will without a doubt be a force willing to impact the South African economy and change the headings from 'debt crisis' to 'growth crisis'. Many South Africans are asking how they could prevent a personal debt crisis in these looming economic times and the answer is actually quite simple.

It's personal finance management. Or, a.k.a. taking control of your spending habits!

The money flows, but where does it go?

Too many people go with the flow when it comes to personal finances. Their cards keep on swiping and when the one card pings with a limit, the other is taken out. It's not that anyone is trying to be purposefully bad with money, but in a fast-paced world, giving attention to your personal finances when there's no inherent desire or talent for it can be a hard discipline to learn. Going with the flow, happens before you know it, and then the uphill battle starts to reverse your spending habits.

Wait a minute, I don’t have to use Excel?

Fortunately, we don't live in ancient times (in Internet terms, the early 2000's) and it doesn't take an in-depth understanding of Excel Spreadsheet to keep track of your finances. There are powerful mobile applications out there that can help you set up a spending plan well within your budget and keep track of your expenses.

Using a personal finance management application, like local powerhouse app, 22seven (an Old Mutual solution), will not only help you track and control your personal finances but help to avoid the number one pitfall of personal finances. The lack of saving your money FIRST.

Sadly, a massive number of South Africans are leaving saving for 'when there's money left at the end of the month'. For most, there will quite simply always be more month at the end of money. Using a personal finance management app can help you allocate your first portion of money to a steadily growing savings or investment account through monthly budgeting. With an app like 22seven, you will even be able to track your investment and learn more about your spending habits in the process.

One, Two, Three

An app doesn't take a chunk of time to manage like a spreadsheet and using an app for your personal finance management can lighten the load of worries immensely. Especially once you track and change where your money is going. You can create spending habits through a spending plan that tackles savings first, debt second, responsibilities third (assuming you have enough to cover the first two FIRST), and leave luxuries for a time where it doesn't eat up your buffer for a looming debt crisis. It will be one, two, three and next thing you know - a personal debt crisis will be something of the past, only a national debt crisis that didn't seem to hit you at all.

Apps are great, but if you're scared of any other phone than a Nokia 3310, and your computer looks like an alien to you - grab your pen and paper! Your future you will thank you. It might not be easy, but it will be simple. Personal finance management is far from a new thing, but we are hoping that with this quick chat about it, it will be a fresh thing for many South Africans to avoid a personal debt crisis!

Fincheck is all about helping people to make better financial decisions. This means we provide the necessary information for you to apply responsible lending in your life and also post regularly on how to be a better financial you. You can subscribe to our newsletter here if you want to stay updated with the latest news!

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