01/06/2026
How to budget if you're living pay cheque to pay cheque
Tip #1: FOCUS ON DEBT 👆
When you save, you're giving yourself financial freedom. When you take out credit, you're borrowing from your future self – and potentially delaying that financial freedom in the process. Ideally, 30% of income should be spent on financial goals, inclusive of servicing existing debt.
"Pay more than the minimum" 💰💰💰
As tempting as it may be, avoid paying the bare minimum instalments to eliminate debt.
"Avoid debt re-advancement – if you can" 🚫🔒🚫🔒🚫🔒
Often, people access the cash they've already paid towards their loan via a re-advance facility, which most credit providers offer.
This means the debt just gets further extended.
That said, it could make sense to make a re-advancement on a home loan, an example of responsible credit if it can help you eliminate something like a store card or personal loan.
Discuss your options with a financial planner Francis Gous CFP® / 0798183547, who will be able to assist in making the decision best suited to your financial situation.
https://www.sanlamadvice.co.za/adviser/nassaux/contact-us/
❗️❗️❗️ "Understand your agreements"
Common among motor vehicle finance options, a balloon payment is a lump sum you need to pay at the end of the finance term and is much larger than all the payments you would've made before it.
Often car owners aren't prepared for this payment and thus refinance it when it becomes payable, thereby extending the credit term.
Alternatively, people opt to purchase a new vehicle via finance and include the previous balloon payment into the new credit agreement (i.e., increasing the capital debt).
This continues the debt cycle and delays your financial freedom for another finance term.
TO AVOID THIS, make sure you understand the terms of any finance agreement you enter into and budget to save towards a lump sum to avoid any nasty surprises.
🎯 "Target high-interest debt first"
If you have multiple debts, there is a smart way to eliminate them and transform your budget into one that helps grow your wealth.
List all the institutions to which you owe money, and alongside it, the capital balance owing and the rate of interest that is charged on the debt. 💳
Then look to increase contributions towards the institution that is charging the highest interest rate – thereby reducing the capital debt and loan term sooner than the initial contract.
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