6 key tactics for successful budgeting

6 key tactics for successful budgeting 2
Tactics for budgeting

Budgeting for a lot of people is not something they want to think about. When they do think about it, it creates anxiety and is filled with a lot of negative emotions. Some people though find creating a budget a positive experience. For them, budgeting is freeing.

The first word that came to my mind when I thought about creating a budget for my family was ‘restrictive’, I have since changed that to ‘liberating’.

Here are 6 tactics that turned my negative budgeting perception around.

SMART goals Illustration 25641308 © Flytosky11 - Dreamstime.com
S.M.A.R.T goals

1. Set a S.M.A.R.T goal

Goal setting is used in many areas of our life whether school, work or even life plans. Choosing the right goal is what makes the difference.

Setting a S.M.A.R.T goal is what will ensure that you succeed whether you use it for setting your budget or for setting life goals.

To explain S.M.A.R.T goals, I am using the example of a new car but SMART can be applied to any goal, including school marks.

S- Specific, your goal must be specific.

To make the goal specific you need to know what car you want. Brand, year, model, size, safety and environmental impact!

M- Measurable.

How does this apply? Choose a car that fits your earnings, so if you earn R20 000 a month your car repayments, petrol and insurance should not cost more than R3 000- R5 000.

A -Achievable.

Can you do it? Don’t dream of a luxury car when you won’t be able to afford the petrol, the tyres or the insurance based on what you currently earn. That is a goal for later. Now you want to focus on a car that you can actually afford and won’t get you into more debt than you can handle.


Will it work for you? If you are a single person, who lives in the city and vacations in cities, why buy an off-road vehicle? If you drive long distances, your need will likely be, fuel economy and comfort. If you have a family, safety is a priority as well as fuel economy when doing the daily school run.

I met a family where the husband drove a small secondhand car as he only went to work and back and the wife had a large 6 seater for her daily use. They saved a lot of money on the small car and therefore could afford the larger car.

T-Time Orientated.

Set a date to achieve your goal. How much can you put away towards your car? Do you have enough for the deposit, at least 20%? If you can save R5 000 per month, how long do you need to save for?

By choosing a cheaper car you make your goal more attainable and you are more likely to stick to your budget.

2.Use stressors as a motivation

Most people only think about budgeting when they are in crisis, while this is great because it has created awareness that you need a budget, the motivation often fades when the crisis is over.

What I mean by using stressors as motivation is that you need to look at what causes you everyday stress. http://kasheringyourlife.co.za/where-did-the-money-go/

Do you worry that you can’t afford to feed your family this month? Do you have enough money saved if you want to stop working or take extra maternity leave when you have a baby? Is your current car a death trap and needs to be replaced? Does your house need maintenance? Can you afford to send your children to College/Varsity?

These are the everyday stressors to motivate you. They are specific, they are measurable, but are they achievable and relevant and will you be able to do it in the given time frame?

What if you only earn R3000 a month and you have a child in grade 11 who wants to go to University? Can you put away the R30 000 in the next two years to pay for the first year? What about 2nd and 3rd year and then honours? You would need to put away between 40 & 50% of your monthly salary for the full two years!

This is not a reason to not budget for it, it is a motivation to create a budget that allows you to save as much as possible each month and start looking into bursaries, scholarships and loans.

When you start your budget, don’t try to cut back immediately, this will just lead to you becoming miserable and angry.

Take a month or two to track your spending alongside your proposed budget. Once you know where your money is going, only then is it time to cut back.

3.The 50, 30, 20 budgeting plan

Divide your salary after taxes into 3 parts. https://twocents.lifehacker.com/10-good-financial-rules-of-thumb-1668183707

Half your salary (50%) goes to living expenses, such as housing, groceries, utilities, insurance, transport, education. These are your needs.

Then 30% goes towards wants, Pay TV channels, clothing & shopping, hobbies and entertainment

Your last 20% should be to pay back debts and to save for that goal you have set.

Most South Africans do not live this way, that last 20% is usually used only for paying back debt but not getting out of debt. Instead of saving the money is often absorbed into the 30% for wants.

By setting up your budget using the 50, 30, 20 rule you create limits and just with rules and routines for our children, budget limits give us a structure in which we can grow and become financially more secure.

Once you have your budget, stop using your credit cards! Debit cards should be used for the big expenses only and then be put away. Cash should be used whenever possible. This is because cash is tangible and handing over cash for purchases makes you more aware of your spending.

Banks today make it too easy to get credit and then we have no concept of zero. Zero is when we have no more money, but with credit cards and adjustable overdraft limits, zero keeps moving.

When you use cash only zero is zero, you have no more money to spend.


Create scarcity to help you save. What I mean by this is that using your budget to live on and not the balance in your account will allow you to save towards that goal you have set.

If your budget says you have X amount to spend then that is what you have, regardless of what is in your bank account.

All the balance in your bank account will tell is the amount in there, it doesn’t tell you that it is for those debit orders that need to go through, or that school trip you will need to pay for.

Regularly check in on your budget to help you stay on track. If you are the kind of person who likes details then create a category-specific budget.

 If you are someone who would prefer a more generalised budget then only create main categories, like Transport- this would cover petrol, maintenance or taxi fares, Household expenses- would cover groceries, toiletries, household cleaning, gardening service etc., Insurance- would cover life, car, home, medical aid policies and insurance.

A great tip for staying in budget is ‘week money’. You draw up your main budget and then pay your monthly expenses. Once that is done you then divide your budget into how many weeks in the month. One the first day of each week you draw out that cash and use it exclusively. No cards, including debit cards. Once the money is done, it’s done!

5. Get a tenant

If you have space, why not get a roommate or a tenant? Use this money towards your housing costs.

Another option is to let your children stay with you as long as you can tolerate and charge rent. You can charge 10% of whatever they earn. That means whether they are employed full time or have part-time jobs there rent is affordable to them, it also teaches them about budgeting.

If you do not need the money to help with living expenses, then put that money into a savings account for them and gift it back, when they graduate or get married or have some other life event.

6. Find a system that works for you

If you are the pen and paper kind of person then that’s what you use to draw up and track your budget.

If you like technology, there are tons of apps out there for budgeting.  I use an Xcel spreadsheet. My bank a budgeting tool on their App, yours may also have this facility. My husband uses a very intricate spreadsheet he created. My oldest daughter uses an app called?

Budgeting is a good thing and everyone should do it. You just need to find what works best for your needs.

Don’t budget just because you think you must, budget because you have a goal you want to achieve.

What is your S.M.A.R.T goal?

New Year 2020 and beyond

New Year 2020 and beyond 4
Photo by Helloquence on Unsplash
http://Photo by Helloquence on Unsplash
My New Year Resolution is to get out of debt

New Year Resolution

I don’t normally make a New Year Resolution (the Jewish New Year has come and gone); however, for 2020 I have made a massive resolution for the next decade.


I did really well in 2019 to pay off my store cards and then when they were paid off I went right back to using them!

I am not alone in my debt and neither are you! On the 30/12/2019 Eye Witness News published an article that stated that ‘40% of South Africans who are in debt are struggling to make their monthly payments’.

Paul Sloan of The Debt Counselling Association of South Africa says that there were many people who had more than 8 loans.

He says that if you are using more than 35% of your income to repay loans, you need to ask yourself why? Too many South African’s are starting the New Year in debt.

To read the full article go to, https://ewn.co.za/2019/12/30/concerns-raised-over-sa-consumer-debt/

From debt to riches

A while ago I wrote an article about a book I read by Phumzile Ndumo called “From Debt to Riches”. I used the book as a reference for articles in a series about debt.

Phumelele Ndumo of ThuthukaSA
Phumelele Nduma of ThuthukaSA

I am pleased and honoured that I will now be working with this lady to get out of debt! You can follow my journey in a few places. On Facebook,  by joining either my group, https://www.facebook.com/groups/iamdebtfree/, or Phumzile’s group ThuthukaSA or both. You can also catch the videos by subscribing to my YouTube channel https://www.youtube.com/channel/UCdmweNFIDVH2pg-d8S1J2Yw.


If you feel so inclined, why not join along with me? It is a journey that will be difficult, I know. Old habits are hard to break! It is going to take more than just a New Year Resolution; it is going to take a commitment from not only me but my entire family as well.

How did we start and how do you start?

The first thing I had to do was sit down and list all my debt to the last cent. I have discovered that I am one of those people who have over 8 debts. I missed two during my initial homework phase and only saw them when I printed out my bank statements. Due to unforeseen circumstances, I did have to take out loans from the bank during the year!

New Year 2020 and beyond 5
Cut up your cards today

Then I had to look at each debt and work out in what order I would be paying them off. I also had to cut up my cards so that the temptation to use them in an ‘emergency’ could not happen. This is what happened to me when I paid off my store cards previously.

I did change my Woolworths store card to a Reward card only. I have kept my Edgars card and asked that they freeze the account until it is paid off.

Edgars was a little difficult to get hold of because they are very automated and human interaction is not available. I had to write an email eventually. The reason that I have kept my Edgars card is that we are a family who all wear glasses and we are only on a hospital plan. Certain optometric practices allow you to use your card to pay for glasses.

To avoid the temptation of using my card for other purchases I have given it to my mom to lock in her safe.

The truth!

My debts are costing me nearly R8000 per month in repayments. I had forgotten to take into account that over the years my credit limit on the credit cards has increased, so my credit card debt is actually over R 30 000 on each card.

While to some my debt may seem like a huge amount, to others it isn’t as bad as their debt. Each of us has to think in terms of what we earn and how much we owe.

It is different for all of us. A R40 000 debt for someone earning R5000 a month may take as long to pay off as someone with R 200 000 debt earning R 30 000 a month.

I will be using the debt snowball method to pay off the debts I owe.http://kasheringyourlife.co.za/snowballing-year-round/

I will be updating you via video each month on how my debt repayments are coming along.

Since recording the first video my husband has come on board and is committed to getting out of debt. I will not be sharing his information.

Steps to starting your debt-free journey

  1. Be honest about your debt, hiding it is what gets most people into trouble http://kasheringyourlife.co.za/where-did-the-money-go/
  2. If you can’t afford it don’t buy it. http://kasheringyourlife.co.za/10-things-about-budgets-and-debt/
  3. If possible, join with family/friends who are in a similar situation, the debt-free group is one of your friends’options, see links in the article.
  4. Do the homework!  Here are downloadable spreadsheets for you to use https://www.dropbox.com/s/z10grd5avbgc6o7/debt%20overview.xlsx?dl=0 and https://www.dropbox.com/s/9hmig5df7xdjszd/your%20debt%20payment%20plan.xlsx?dl=0, as well as a commitment contract with yourself to sign and to display as a reminder https://www.dropbox.com/s/nwcnjhxwibkcgjs/commitment%20certificate.docx?dl=0.
  5. Check and double-check that you have a record of all your debts, so that you don’t miss any.
  6. If your debt is more than 60% of your income, seriously consider debt review.http://kasheringyourlife.co.za/debt-counselling/
  7. Cut up those cards
  8. Be strong!
  9. If you can afford the book, I do recommend Phumzile’s book “From debt to riches” and also join her Facebook group ThuthukaSA, the link is in the article above
  10. Do not try keeping up with the Van der Merwe’s, they may be deeper in debt than you!

Welcome to my journey of the next 2 years. Watch my first session here https://youtu.be/_1vZUQDyiss

Debt counselling, consolidation and mediation

Debt counselling

Debt counselling, debt mediation and debt consolidation; these are words bandied about every day. Do you know what they mean?

In Phumelele Ndumo’s book ‘Debt to Riches – steps to financial success’ she covers these topics in detail and in a way that is easily understood and, in my opinion, one of the first books someone in debt needs to read.

When you are in debt there are a number of ways to deal with it. I will simply touch on each topic as I am not an expert on the in’s and out’ of debt counselling.

Debt consolidation

This is where all your debt is put into one account. Speak to your bank about this alternative. This way you only have one debt to pay instead of 10. The best way to do this is with the account that has the lowest interest. This is usually the bond on your house

Debt counselling

This is done through a professional service. To decide if you qualify for debt counselling you need to know exactly how much you owe and how much money is coming in.

The next step is to approach a registered debt counsellor, they will then review the financial situation and, if you qualify, they will then liaise with your creditors to make payment arrangements.

When deciding to go for debt counselling, you need to be over-indebted. This means that you: –

  • Are failing to pay all your debts monthly
  • You pay some debts and skip others
  • You have judgements or garnishee orders against you

If the debt counsellor finds that you are over-indebted, they will draw up a payment plan for you. If you are not over-indebted they will charge you a fee for their time. They may help you with mediation after this or refer you to the bank.

Make sure that you are well acquainted with your debt situation before applying for debt counselling.

Once in debt counselling, this will be registered with the credit bureau and you will be unable to obtain any credit for the next 5 years.

Before finding out if you are eligible for counselling, ask all your creditors for their settlement dates and balances.

All creditors need to agree to the payment plan drawn up by the debt counsellor.

Debt counsellors do not make the monthly payments; this is done by a payment distribution agent!

A lump-sum payment is made to the payment distribution agent, who then pays your creditors.

Once in debt counselling your creditors cannot take legal action against you and your goods cannot be repossessed. If, however, you miss a payment your agreements fall away.

Debt mediation

One of the first things everyone should do before considering debt counselling and consolidation is downsizing your lifestyle. If you go into debt mediation this is something that will be forced on you anyway. Debt counsellors are the people to speak to about mediation.

Once again a payment plan is drawn up and hopefully, the creditors will all agree to it.

Within 5 years of beginning mediation, you must be in a position where your income covers your lifestyle. If not, then you will be placed in debt counselling.

Here are some of the things that the mediator will require from you. These are not negotiable.

Children in private schools must be moved to a public school.

All credit and store cards must be cut up.

A strict budget is drawn up and has to be adhered to.

Getting out of debt is not an easy thing to do and it is important to investigate the company that you use when going for debt counselling.

I feel that changing spending habits as early as possible will prevent anyone from https://kasheringyourlife.co.za/debt-cents-getting-out-of-debt-a-little-at-a-time/ having to go to debt counselling.

Join the Facebook group https://www.facebook.com/groups/iamdebtfree/and learn what I learnt about debt and avoiding get over-indebted.

10 Things I have learned about Budgets and Debt

budget with the piggy bankPhoto by Sabine Peters on Unsplash
What do you owe? Photo by Rawpixel on Unsplash

Budgets and debt go hand in hand. Being in debt usually starts with you not having a budget. By the time you start thinking about a budget, your debt is often already well established.

Over the years I have become an expert on being in debt and trying to create budgets!  And in some months the debt is worse than others.

Here’s what I learned about budgets and debt

  1. Without debt, you have no credit rating.
  2. You learn your money habits in childhood
  3. You think you know how much you spend but you really don’t
  4. Debt consolidation doesn’t work
  5. There are no quick fixes to get out of debt
  6. Even lotto winners need to budget
  7. Our money manages us instead of us managing our money
  8. Cash is King
  9. Envelope budgeting works
  10. A little goes a long way

Over the next few weeks, I will be covering these 10 topics in more detail. Here is a little taste of what I will be writing about.

  • Credit ratings based on how well you pay your debt! Paying your instalments on time and the correct amount, increases your credit rating but at the same time having no debt decreases your credit rating.
    Try buying on credit without existing debt and you will get turned down, especially if you are self-employed and, therefore, don’t have a fixed salary.
  • How your parents and grandparents treated money and money problems are passed down to you. If you received money as a gift, were you allowed to spend it? Or did you have to put it all in the bank?
  • When a client approaches me for help with budgets, the first thing I ask them is “do you know how much you spend each week?”   I then ask them to write down what they think they spend and then, for the next two to four weeks I ask that they keep every till slip as well as keeping track of any money they give to car guards and beggars. For the most part, the reality of what is spent bears very little resemblance to the truth.
  • In general, consolidating your debt doesn’t really work but there are obviously exceptions. Debt consolidation allows you to pay one person instead of many but usually the amount you pay the debt company only covers the interest of what you owe everyone else and does little to pay off the actual debt. They also don’t help you set up working budgets.
  • Google how many lotto winners in South Africa, or even the world, still have their winnings. It is very few. They pay off everything they owe and then start spending and by the time 12 months has gone by they have almost always spent it all.
  • Most South Africans live paycheck to paycheck, with little to no money left over at the end of the month. This is your money managing you and not you managing your money.
  • While you may not earn rewards when shopping, paying with cash will actually save you money in the long run. Debit cards are a necessary evil, credit cards are just evil!
  • It’s as old as time but it works! Envelope budgeting is a great way to manage your housekeeping budget. You only spend what you have!  The downside is it takes discipline to make it work
  • Aside from cutting down on the takeout coffee and using that money to pay towards existing debt, putting your small change into a money box can add up every month, Once again this may take some discipline not to dip in during the month.

Whether you are in debt already or trying to avoid it, follow along each week with these posts and join the Facebook community Debt Free. https://www.facebook.com/groups/iamdebtfree/

Debt Cents -getting out of debt a little at a time


Debt cents is another way to begin lowering what you currently owe. It may take longer than the debt snowballing I previously wrote about. Debt free for R40 per month extra

What do you owe? Photo by rawpixel on Unsplash

What is debt cents

Debts cents is where you take your minimum monthly repayment on any current debts and round it up to the nearest rand. If your payment due is R535.62, then you can choose to either pay R536 or R540.

While this may not reduce your bill by that much, each month of doing this reduces what you owe just a little more.


This is working on your current debts and you can choose to do this with all the debts you have. The most important aspect of becoming debt free is not to create any more of it!

So where possible, try and get rid of or lock up your cards and pay as much as possible online or with cash.

When you are paying online, especially if you are paying on the due date and not before, it is advisable to call the company and let them know you have paid, plus send a payment notification via email.

This avoids those unnecessary phone calls asking for payment.

Remember some transactions take 2-3 days to reflect especially over weekends.

Credit rating

Your credit rating is based on how well and on time you pay off your debts. If you don’t owe any money, you don’t have a credit rating. Sadly while I understand the need for companies to know if you are a safe bet as a customer, it means that we can never be totally debt free!

So how do you become debt free and still have a good credit rating?

Remaining debt free

The problem with remaining debt free is that you need to owe money in order to have a good credit rating!

So how do you do this?

There are 3 ways.

Credit cards
Card anyone?

6-month interest-free card

Some stores offer you a 6-month interest-free or a 12-month account with interest charged. With the 6-month card, it is best to buy one item and then work on paying it off. Never allow this account to have a zero balance. If you don’t owe anything you are considered a poor credit risk! Avoid the 12-month option as much as possible as it costs you more in interest.

Credit card debt

Use your credit card. Buy everything through the card so that you can earn loyalty points, but know that you must be able to cover the full amount owed at the end of the month or you will be charged interest on your balance. Most cards offer 30 days interest-free, so pay on the 29th day at the latest to avoid any interest.

Debt consolidation

This is not my favourite method as the companies charge interest and you end up only being able to pay back the interest and not actually cover the initial debt.

Another way to consolidate debt is to take out a loan, then pay off all your existing debts at once and only be liable to one company. That is if you qualify for a loan large enough to pay off all your debts.

Both these methods I find a little risky. Firstly because they will both charge interest. Secondly, because it is a quick fix and you don’t develop the habit of living within your means.

Paying off your debts a little at a time and not increasing your debt even further creates good spending habits.

A little change can make a big difference!

8 things I learned from the one rand experiment.

While researching the budget section of my blog, I came across the R1 family, a social experiment together with Sanlam.


When I spoke to my mom and editor, she remembered that in 2014 Sanlam ran the R1 man experiment for the first time.


I watched the R1 man (name unknown) and the R1 family or S’bu, Londiwe and kids. It was an eye opener and I learned so much from this experiment. I had already changed my money habits but this got me thinking about more than spending money but also about the psychology of money.



  1. Car and home repayments are our biggest expenses. People often buy their car, or house, as a way of showing how well they are doing. This makes them buy a top of the range car when they only need a middle of the range model. They buy houses at the maximum repayment for which they qualify. So if they qualify for a R500 000 bond, they buy a house for that amount when they can get a house big enough in a less affluent area. For observant Jews the areas are a little more difficult as not using a car on Sabbath means that you have to find a house near a Synagogue and, unfortunately, or fortunately, these homes are usually in more upmarket areas.


  1. South Africans view a pension contribution as an expense not an investment. If your employer pays contributions to a pension fund, request that your contribution is the maximum option. It is for your future.


  1. If you don’t use a shopping list when grocery shopping, you shop using your emotions. Always make a grocery list and never shop on an empty stomach. If you shop without a list, you wander up and down the aisles and take things off the shelf that you want, or feel like, and not what you need
  2. shopping list


  1. Always round up not down. I didn’t know that people round down! Remember R1.99 is R2 not R1!


  1. Using your credit card, an average item that is marked R20 actually costs you about R24. Banks charge interest on credit cards, as do 12 month credit store cards! So if you use a store card that offers 6 or 12 months, always go with the 6 months as this is usually interest free.


  1. Save first, spend later. Decide how much you want to put away for saving and do that before you spend any money. R100 a month into a savings account is a good minimum but you can choose your own amount.


  1. Our spending habits/psychology is established by age 7. Kids learn by watching. If they see you buying indiscriminately, they will do the same. If you don’t look after your things they won’t either.


  1. South Africans spend 76% of their income on servicing debts. Try to pay off your debt and not create more. This, I think, is one of my families’ most difficult challenges as it is for a lot of families. Clothing store debt! The kids keep growing and they need clothes so, just as you think you can pay it off, the next season arrives and last seasons clothes no longer fit!


Do you know where your money is going every month? How much debt are you in? Do you think you could live on your money, with no credit, no internet banking, strictly cash for a month?