Capsule Wardrobe your budget

My eldest daughter has been learning about women in Britain, in the early 20th century, who fought for their right to vote, and otherwise known as the suffragettes. As a fourteen year old girl, she could not imagine a world where women did not have equal rights as men, and as she studied the subject further, she was moved by the lengths these women went to, so that all women have a right to vote.

I don’t think any of us could imagine a world where a woman cannot open a bank account or buy a house or apply for a job. I know we have a long way to go but we have come so far already. Yet, when it comes to our finances and taking control of our finances, as a financial planner I see over and over, that many women have no or little interest in their finances, and many chose to ignore it.

Maybe it’s because we as women have so much else to deal with. New research, done by Facebook COO Sheryl Sandberg, found that during the COVID-19 pandemic women with full-time jobs, a partner, and children, report spending a combined 71 hours a week on child care, elder care, and household chores, compared with 51 hours for men. Sandberg says: “We know that when things get hard, women get hit the hardest, the double whammy of what happens in the workforce and then what happens to the demands on the home front, has never been higher.” I know for myself, the last thing I need is another thing added to my already overloaded plate and never ending to-do list.

What if we could simplify financial planning to make it easier to follow? I am not sure about you, but I have found building a capsule wardrobe is relatively simple to do. There are only few simple steps to follow and it can be adjusted to any colour palate, lifestyle, budget and season. What if I could simplify your finances in 3 easy steps?

Step One: Setting Up a Budget. The best place to start with your finances, is to set up a budget. It can be as simple as income less expenses but make sure you have a few key items in your budget, as listed below. The aim of the budget is to ensure all the expenses are listed and your expenses do not exceed your income.
Income from all sources (gross and net income, rental income and maintenance).
All savings, emergency, medium and long term savings. I like to list all my savings as a line item after my income. I believe that unless I pay myself first, saving for my goals, I will not stick to the budget.
Giving. Money and our finances need to flow, and unless there is a regular outlet, besides our own expenses, it will stagnate. By placing it at the top of my budget, it reminds me to think of others less fortunate than myself.
Fixed monthly expenses, these include the bond, rental and car repayments.
Risk premiums and medical aid. Short and long term cover and other insurances premiums.
Educational expenses, school fees and extra murals
Household running expenses, ADT, garden services, rates and water, electricity and internet.
Household expenses Groceries, cleaning materials and toiletries
Lifestyle expenses, these include entertainment, clothing and personal hobbies.
The list is endless and it can be more detailed or simpler, depending on your lifestyle. Please feel free to email if you want a detailed, easy to use, budget spreadsheet.

Step Two: Goals and Lifestyle Ambitions. What are you working for? Why are you working? What are your dreams and aspirations? These evolve and change with each season. Write down your goals and a “bucket list” and match them against your budget. Your budget should marry your goals and ambitions. For example, if your goal is to go on an annual family holiday, make sure to include it in your budget and set up a separate savings vehicle, such as unit trusts, to cater for this goal. If you want to be debt free or pay off your bond sooner, reduce your household and lifestyle expenses so that you are able to save more and pay more towards your debt.

Step Three: Review Your Budget and Goals Regularly. Setting up a budget and sticking to it, forces you to look at your spending patterns and notice where you are spending unnecessarily. By reviewing your budget, helps you rethink your spending habits and achieve your financial goals.

Spend some time this woman’s month to dream and think about your financial and personal goals. Carve out some time to write up your goals and once you know what you are working towards, setting up a budget and sticking to it becomes easier.

Posted in Blog.