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11 reasons you are struggling to save money

There are many reasons  people struggle with saving money. Many factors that we are sometimes are unaware of. In this article we will discuss some of these reasons.  11 reasons you are struggling to save money 1.Cost of living It would be an injustice to talk about saving money without acknowledging the cost of living. The inflation rate keeps rising which means prices are hiking while our income remains the same.  High costs of living, such as housing, healthcare, and education, leave little room for saving after meeting essential needs. 2. You don't Budget (or stick to it) A budget is to your finances what water is to your body. You might survive a day or two without it but in a long term you will feel the effects. Without a clear budget, it's challenging to track income, expenses, and savings. Overspending becomes common, making it difficult to save 3. You live beyond your means Spending more than you earn will leave you with nothing to save.  Spending more than w...

How to get out of debt with a low income

Getting out of debt is challenging on any income level. It is especially harder when you have limited means and only earning minimum income.

 However, you can still lead a debt free life by following these steps.

8 Effective ways you can payoff debt on low income 

  1. Stop taking on new debt

To get out of debt, you should first stop taking on more debt. Taking out more debt will sink you further into the pitfall that is debt. 

You must learn to stop borrowing money. And that means no more loans. You must learn to live off what you gave. And nothing more.  Your views about money, attitude towards debt, behaviour, and finances as a whole needs to be evaluated. 


  1. Determine how much you owe


Before you start paying off your debt, you should know the exact amount you owe. Knowing exactly how much you owe will enable you to create a debt payment plan that is best suitable. 


You need to know the balance on your debts, the minimum payments, interest charged, and the terms. 


  1. Track your spending

Do you know where your money goes to? Really?


Tracking your spending is one of the popular finance tip and for a good reason. It tells you how much you spend where and explicitly details your misuse of money. It will show you whether your money is working for you, against you, or going straight to the drain. 


Knowing exactly where your money goes will help you in cutting off some of your expenses without affecting your life. 


  1. Create a budget

Getting out of debt means living below your means and being a mindful spender. Now that you know where you are spending you money, you can create a plan on how you will spend it going forward. Create a budget. Put it in writing instead of just putting it in your mind. 

Also write down your realistic and achievable financial goals and objectives. And a plan on how you will get there. 


Do not forget to create an emergency fund 


  1. Create a payment strategy

You need a strategy on how you will pay off your debt. The strategy should be sound and easy to implement. It should also maximize your payment schedule. 


  1. Don't just pay the minimum payments

Pay more than the minimum payments and interest. This is fastest way to be debt-free. 


Paying off more than the minimum payments will reduce your debt significantly and you will end up with a reduced debt term.

  1. Look for ways to earn more money

An ideal job would pay you a liveable wage with a lot of benefits. Ideally you wouldn't need more than one stream of income.

However, life is tricky and the economy is imbalanced. You need multiple streams of income to achieve financial freedom. Look for ways you can earn money.

  1. Boost your credit score


A credit score is like your school report card. Lenders use your score to determine your eligibility and risk. The lower the score, the higher the risk of you not paying them back. Your credit score is also used to determine interest rates. Again the higher the risk, the higher the interest rate 


8 hacks on how to boost your credit score


  1. Pay on time

Paying your debts on time creates a trusting relationship between you and the lenders. How well you pay off your debt and when you do it will influence credit score.


  1. Be an added authorised user

An authorised user is someone added to a credit card by the primary holder. Anyone can be an authorised user as long as they meet the requirements of the credit card company.


  1. Pay off your debt

paying off your debt is an integral part of credit score. It will indicate that you are a responsible person who can be trusted with loans thus worthy of being borrowed. This will positively impact your score. 


  1. Increase your credit limit

Increasing your credit limit will reduce your utilisation percentage. For example, if your credit limit is R5000.00 and you use R500.00 (10%) then apply for an increase to R8000 but still utilise R500.00. Your utilisation will be 6.25%.


  1. Use your credit card responsible

Reduce your utilisation. Do not maxout your credit limits. Preferably use 10% of your credit. 


  1. Keep your old cards open

The lifespan of your credit matters. How long you've had a good credit report will inform the credit bureaus of your responsibility. The longer you have your credit cards, the more reliable you are. Even when you do not utilise them.


  1. Avoid applying for new credit

Applying for new credit or having new credit enquiries negatively affect your score. 


  1. Dispute errors on your report 

Regularly check your credit report and dispute any discrepancies in it. It can be that you have paid off a debt but it still appears on your report or your report indicates missed payments while you have paid.


You have every right to question it.


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