The last few years have been extremely difficult for consumers. First, the COVID pandemic wreaked havoc on the global economy with millions of people losing their jobs. Recently, the war in Ukraine, soaring global inflation, and rate hikes have put even more pressure on our wallets. Financial stress is something more and more people have to face, and it’s especially challenging for single mothers striving to do their best for their children.
Johann Rossouw, a Certified Financial Planner at Fiscal Private Client Services, has listed a couple of tips for moms and how they can deal with financial stress.
Take inventory of your finances
Have you ever woken up with the realisation that there is too much month left at the end of your money? A budget is the simplest way to avoid this sinking feeling and the starting point of any good financial plan. This may not be the most exciting piece of advice, but it is critical to monitor your bank account to know where your money is going.
This does not need to take up hours of your day. With online banking, you can immediately see where your money went to – some banking apps even automatically categories your spending for you. If you spend 5 minutes once a week on budgeting, you will already have a much clearer picture of what you spend and where
Cut down unnecessary spending
Once you have a budget in place and you know where your money is going, you need to identify unnecessary expenses that you aren’t necessarily benefitting from. Are you paying money for a streaming service, but you rarely use it? Cancel your subscription. Are insurance premiums becoming too expensive? Shop around for alternatives. Focus on expenses that add no joy or utility to your life and try to reduce or eliminate these expenses as far as possible. Spend wisely, but do not completely deprive yourself.
Avoid debt as far as possible
We are in an environment where interest rates are rising. This means that the cost of servicing your debt will also be increasing. If at all possible, try to avoid credit cards and personal loans from banking institutions where interest rates can easily be 15% and above. If you already have some debt, make sure to continue paying the minimum monthly repayment. If possible, use any surplus money you might have towards paying the debt with the highest interest rate.
Start a Side-Hustle
A side hustle is a source of extra income outside of your main job. Examples of a side hustle are extra Math lessons for schoolkids, walking dogs, doing art commissions, and starting an online store. Find your niche and try to earn some extra moola on the side.
