• Ruwayda Harris

Saving on a tight budget

Updated: Mar 3

You’re feeling the pinch; you’re strapped for money; you don’t have two pennies to rub together… You need help to get out of debt but all you ever hear is save; start an emergency fund; join a stokvel!

And, you want to yell at the top of your lungs: “How?! With what money?!


When paying bills and struggling just to survive, it’s almost impossible to see the light at the end of this dark and scary tunnel. The truth is that life isn’t about paying bills and endless financial responsibilities. You should be able to live your dream and enjoy the finer things on offer.


What you’re about to read may seem simple, but you’ll see a remarkable difference in your financial situation if you’re prepared to bite the bullet for a few months and stick to these clear and effective guidelines from the Oracle of Omaha, American billionaire Warren Buffett, who is considered one of the most successful investors in the world. This financial guru’s advice is of practical use to everyone from the minimum wage earner to the high level executive.


1. JUST GET STARTED

“Someone is sitting in the shade today because someone planted a tree a long time ago. Trees, like wealth, don't grow overnight.” Buffett explains that not taking the first steps to start investing, paying off debt or saving is where many fail. “There are too many choices. Too much jargon. Not enough time. Not enough money. Excuses, excuses.”


You may argue that it’s easy for Buffett to judge and that he doesn’t know what it’s like not to have money because he has billions! The truth is that Buffett earned most of his wealth in the last 30-odd years of his 90 years of life. His advice is to make time to learn the essentials and get started. Mistakes will be made, but learn from them and rectify them. “Whether or not you eat steak and wine or cold cuts and grape soda at retirement depends on the actions you take now.”


Level Finance can help you get started. We integrate into your company’s payroll and into your bank account to provide you with financial tools that help you proactively manage your money. In addition to this we allow you to save a portion of your salary before payday. Level reduces the need to dip into savings or access expensive credit between pay cycles.

2. SAVE FROM THE TOP

“Don’t save what is left after spending: spend what is left after saving.” Buffett advises you reconsider your plan to save money left over after paying monthly bills and debt, because you won’t have much left over to save. And when you have little money left, Buffett says this makes it easy for you to tell yourself: “I’ll start saving next month”. You may think it’s not possible to pay your debt after taking a percentage of your wages or salary for savings. So, experiment by paying just 1% of your salary into a savings account.


Level Finance allows you to do this by saving a portion of your salary even before payday. Working with established financial services providers, we help you save and achieve your financial goals to help you build wealth and financial agility. Set a goal to increase your savings amount by another 1% every month until you are effortlessly saving a percentage you can easily afford.


3. DEVELOP GOOD SPENDING HABITS

“If you buy things you do not need, soon you will have to sell things that you do need.”

Buffett believes that you lose money when you don’t get value for your money – for example, paying high interest on credit card debt or buying things you don’t need and will hardly use. “Price is what you pay; value is what you get,” Buffett wrote in his 2008 Berkshire Hathaway shareholder letter.


“Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down,” says Buffett.


Level Finance offers the following additional tips to consider:

· Don’t shop on an empty stomach; make sure you eat before you hit the shops.

· Make a weekly or monthly shopping list and stick to it.

· Oftentimes shops entice us with bulk buys and so-called special offers that are not on the shopping list.


If it’s not on your list and you don’t need it, don’t buy it!

#LevelUp and say goodbye to interest, credit and loans

4. GET OUT OF DEBT

Debt is debt. Whether it’s good or bad – too much debt can get you into serious financial trouble.

“I’ve seen more people fail because of liquor and leverage – leverage being borrowed money. You really don’t need leverage in this world much. If you’re smart, you’re going to make a lot of money without borrowing.” – Warren Buffett, 1991 Lectures at Notre Dame


Buffett’s advice is to borrow wisely, if at all.

“Good debt” propels you into a better financial position in the long term. It includes things like a student loan or investing in tools to start your own business. Bad debt, like a maxed out credit card from overspending or a payday loan, has no positive impact on your life and can in fact harm you financially and emotionally.


The worst debt is money owed to your local mashonisa. This is unsecured lending, which comes with an exorbitantly high interest rate and which is often used for small expenses.


Level Finance lets you access your accrued but unpaid income whenever you need it. This is your earned pay, it’s not a loan, so there’s no interest charged and no credit check – giving you the tools to absorb financial shocks. We help you avoid one penalty at a time; reduce one debt at a time; realise one dream at a time.

5. DEVELOP GOOD FINANCIAL HABITS

“Chains of habit are too light to be felt until they are too heavy to be broken… you can have any habits, any patterns of behavior that you wish. It’s a matter of what you decide.” – Warren Buffett, Lecture at University of Florida School of Business


We often don’t acknowledge the good habits we have until we see the significant impact they have on our future, like contributing diligently to a retirement plan when friends and colleagues aren’t able to. When you acknowledge your good habits, you’ll pat yourself on the back for buying quality yet affordable clothes, drinking water instead of spending money on a soft drink or a cup of coffee, taking a packed lunch to work instead of buying lunch, driving a well maintained 10-year-old vehicle that’s paid off.

However, if you don’t have many good financial habits yet, start with saving from the top. Don’t buy coffee, rather make your own at home and pour in a traveling mug. If you’re an ardent book buyer, cut down on buying books and for the time-being borrow books from your local library.


Level Finance helps you save and budget, while reducing your reliance on debt, which ultimately improves your financial agility. Our earned wage access platform helps you with short-term financial relief that will in the long term help you build a legacy for your family.

6. END THE PAYCHEQUE TO PAYCHEQUE LIFESTYLE

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” Buffett advises against getting a payday loan at exorbitant interest rates because it will only propel you further into debt and you will continue to live on more than what you earn. He says it makes better sense to trade in an expensive car for a much cheaper model to bring monthly expenses down. He also advises you to make a thorough budget that accounts for every cent you take in and every cent you spend.


Level Finance’s budgeting tool removes the ambiguity of managing your money by giving you feedback far more useful than just your bank balance. No mental math or guessing required. We remove the stress of managing money by helping you unlock the power of your paycheque; reducing financial stress by providing short-term relief to millions of employees who are living paycheque to paycheque.


Use Level Finance to Help You Save Your Money

Want to save money fast? Level Finance builds wealth and dignity for employees through savings, automated budgeting and access to pay when you need it – all before payday arrives. Level is designed to help you become financially agile by giving you access to your accrued but unpaid income when you need it, even before payday arrives. No need to take out exorbitant loans from exploitative payday lenders like mashonisas. Level can help you set up a budget and savings goals.

Visit www.levelfinance.co.za or WhatsApp 076 179 3437 and refer your employer today!


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