Do you ever feel like you're living paycheck-to-paycheck? Like you have o no control over your financial security?
If you’re just starting out and have no idea where to begin, then read on! The Glow app has a wealth of resources available to help you get started on the right path to financial literacy. With the right knowledge and guidance, everyone can learn how to manage their money wisely.
In this article, we'll discuss what financial literacy in South Africa is and why it's important, as well as provide some tips on generating extra income from alternative sources in South Africa. These ideas speak to the South Africans with no money. You can start to earn an extra income with just your laptop and an internet connection.
The State of Financial Literacy in South Africa
Financial literacy is an important life skill to have in South Africa, and yet many people lack the basic knowledge and understanding of how to manage their money wisely. In fact, a survey by the Institute for Financial Literacy found that only 14% of South Africans have even a modest level of financial literacy.
Fortunately, there are steps you can take to learn more about financial literacy and begin to gain control over your finances. One way is to learn about alternative income sources—even if you don't have much money. By looking for ways to earn extra income, you can greatly improve your financial situation and start building the foundations for a more secure future.
If you're like many people in South Africa, chances are you'll need a little help getting started with generating alternative income sources. Thankfully, there are plenty of resources available such as blogs, online courses, and even free seminars that can provide guidance on how to properly manage your finances and increase your income.
Why Financial Education Is Important
Financial literacy is an important part of financial freedom. It gives people the skills and knowledge to make informed decisions about their finances and helps them to plan for the future. In South Africa, financial education can be especially beneficial, as there are many people living without access to basic financial services and struggling with poverty.
When it comes to building better financial health and taking control of your finances, there are two important things to consider: managing current income and generating an alternative source of income.
Managing current income means having a budget that accurately reflects your total monthly expenditures. It also involves understanding how interest works on loan repayments, as well as developing good saving habits.
To generate an alternative source of income, South Africans can look at options such as starting a business, freelancing or investing in the stock market. Staying creative and exploring the available resources can help individuals come up with additional income streams that can provide them with more financial freedom.
Managing Your Money: Budgeting and Saving Tips for South Africans
When it comes down to it, learning how to manage your money is key to financial literacy. The good news is that South Africans have plenty of options when it comes to budgeting and saving. Here are some tips on how you can get started!
Improve financial literacy
Online courses are an economical way to continue learning. Banks and other financial institutions offer financial literacy courses. These courses cover topics such as budgeting, investing, and retirement savings. Free Unscripted Personal Finance Course
Make a budget
The most important thing you can do for your finances is make a budget. Start by writing down your income and subtracting all of your expenses. Monitor your spending every month and make adjustments when needed. It’s also helpful to set aside some money each month for an emergency fund so that you have something to fall back on in case of financial hardship.
Stick to the plan
Make sure you stick to your budget diligently. It can be tempting to overspend when going shopping, but discipline and self-control are necessary if you want to successfully manage the money coming into and out of your accounts each month.
Track your spending
In order to know what to change and what to work on, we need to have a good understanding of where our money is being spent and what it is being spent on.
Borrowing money by your next payday is easy, but it can set you back even further. Avoid debt by living within your means. If you can't buy it in a month, you can save it for the next payday.
Beware of Special Offers
When shopping for essentials, look out for special offers to save you money. The money you save is the money you would have spent had the promotion not been running, so you can set it aside for a bad day.
Buying in bulk saves you money because you don't have to replenish your essentials as often. Saving money on transportation and making fewer trips to the store means less temptation to buy things you don't need. Also, by buying in bulk, you can put your money to its intended use right from the start.
Calculate every cent
Know where you're spending your money to avoid impulse buying or buying things just because they're on sale. Once you have your money, you can extend it until your next payday because you won't have to spend on unnecessary things. Detail your budget and make sure it covers everything, so you don't overspend.
Bring your lunch to work
When it comes to grocery shopping at work, lunch is the biggest expense for most people. You can make it the night before (make double dinner for leftovers the next day) or go the meal prep route and prep your Sunday lunch in advance so you don't have to cook all day. You can also do it for about a week.
Keep your shopping list tight
If you stick to your shopping list, you can make big strides toward your savings goals in a short period of time. If you head to the grocery store with a few recipes in mind but don't have a list handy, you may be tempted to stock up on extra shampoos or stock up on sale staples.
How well do you know the four concepts of financial decision making?
Do you know interest rates, compound interest, inflation and risk diversification? Well, you have come to the right place:
Interest is the price you pay to borrow money or vice versa, the payment you get when you lend money. Interest rates are usually expressed as a percentage you pay (if you borrow) or receive (if you lend) that percentage of the total loan amount. Understanding interest rates can have a big positive influence in your life. You will make calculated decisions before taking out any type of loan. You can also use interest rates to your advantage when investing your money.
A simpler way to think of compounding is as "interest on interest", where the amount of interest payments is based on period-to-period changes, rather than fixed at the original amount of the principal.
Compound interest allows investors to earn potentially very high returns over the long term and is essentially a risk-free way to generate profits. This is very different from equity investments, where capital gains are realized only if the market value of the security increases over time (i.e., buy low, sell high).
Inflation is the annual increase in the cost of goods and services. Inflation has a big impact on our daily lives and the value of your hard-earned money, so it helps if you know how inflation works.
Diversification is an important concept in investing and trading that involves spreading investments or activities across multiple assets or markets to minimize risk and increase returns.
By diversifying their portfolio or operations, investors and businesses can reduce their exposure to a single asset or market and increase their chances of success.
Explore different income sources
If you’re looking for ways to generate additional income, there are plenty of options in South Africa. Some common ones include selling items online or through marketplaces, freelancing through platforms like Upwork or Fiverr, taking part-time jobs, investing in stocks or cryptocurrency, or starting a side business such as blogging or dropshipping. To ensure success with any alternative income sources, make sure you know how they work before making an investment of time and/or money into them.
Alternative Income Source you can Use to Make Money
Learning how to manage your money wisely is a key part of financial literacy in South Africa - and fortunately, there are other ways to make money besides sticking to a full-time job. If you're looking for alternative income sources, we've got some great ideas for side hustles and part-time jobs that can help you to earn extra cash.
If you're skilled in a particular field, like writing, graphic design or web development, freelancing can be an excellent way to generate an additional income. Websites like Fiverr and Upwork provide platforms where freelancers can connect with clients who pay for services like logo design or blog writing. All you need is a computer, internet access and the right skills!
Do you have knowledge in a certain subject? Why not share it with others? You could consider teaching classes - either in person or online - covering topics such as math, science, English language or even music lessons. With flexible hours and the potential for high earnings, this could be an ideal way for you to earn extra income.
Do you have some old clothes that don't fit anymore? Or how about furniture items that are just taking up space? You could sell your goods via online channels like eBay or Etsy - so why not make use of those items instead of throwing them away? With an online shop of your own, you might be able to make profits while decluttering your home!
With these tips on alternative income sources in South Africa, hopefully now you can find ways to make more money and upgrade your financial literacy!
To Sum it up
Financial literacy in South Africa is of utmost importance – understanding how to manage your money wisely can make a lasting impact on your life. In dire economic conditions, it is essential to know how to generate an alternative income source, in order to provide for yourself and your family.
Whether you’re just getting started or are wanting to supplement your current income, there are numerous strategies for earning extra income. From freelancing to investing to starting your own business, the possibilities are endless.
Despite the financial crunch South Africans are facing, there are still ways to get ahead and secure a better financial future. With dedication and the right approach, learning to manage your money wisely can be the key to success.
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