Five Fundamentals

We are in the midst of a global recession - the world economy has had the mother of all sugar crashes and after years of living a good life scoffing down credit it is time to take stock and get back on track. The only thing that can save us now? Getting financially fit again...

Step 1 - shift the mindset

Deciding to get physically fit takes a change in mindset, a watershed moment when you have had enough of being unhealthy and choose to change your lifestyle. Similarly, getting your finances in order requires a dedication on your part to make it work. If you really want to save yourself money, make a commitment to yourself and to the cause and follow your plan religiously. There already? Half the battle is won.

Step 2 - make a list

Just as it is important to make a list of all the foods you eat so you can work out what to cut out, knowing exactly how you spend your money is crucial if you plan to shave some expenses off your lifestyle. Make a list of all your expenses during a given time frame - and double up by going through your bank statements to ensure that nothing slips through the cracks. Don't forget those late afternoon chocolates and the coins you used to pay the car guard. Include everything; then move on.

Step 3 - draw up a budget

While eating and exercise plans are your blueprints for successes in health, drawing up a budget is crucial if you plan to make significant inroads into your personal finances. Knowing what you spend each month allows you to plan ahead and, even more importantly, it will highlight where and when you save money by having each month side by side. It is the best way to see how you are progressing and without one you may not realise how your new approach has affected your savings. Draw one up. TODAY.

Step 4 - Embrace Technology

You use heart rate monitors as you run and check your BMI to track your progress when you exercise - isn't it time you embraced technology in your personal finances as well? Banking online is the fastest way for you to shed a few Rands off your monthly expenses.
Apart from being able to do it from the comfort of your home (meaning you'll be less inclined to find an excuse to manage your money) you will save money on everything from money transfers to checking your balance. Banks have begun increasing the costs of banking within a branch to save on their own admin costs, so by banking online you'll negate this increase.
Need an example? You could spend just under R20 every time you make an account payment from a branch with many transactional accounts. The same thing online? Free with an electronic account.

Step 5 - Little things add up

The little things add up - make no mistake about it. Sticking to your diet is crucial if you want to see the best results - cutting down costs is no different.
Drawing money from another bank's ATM has got to be one of the most needless wastes of money in this country. You'll pay around R7 extra for every transaction you make from another bank's ATM. Do that a couple of times a month and you've chucked away a Friday lunch.
Sites like www.justmoney.co.za allow you to compare bank costs in real time. Plug in the way you bank, compare the various costs within the marketplace and make a call on where you should be banking. And please - don't just bank with the same bank your parents did - times have changed - its time you made the change too.

The fastest way to waste money on bank charges? Become apathetic about the little things.

World Economic Forum on Africa

The World Economic Forum has rolled into town, complete with flashing blue lights and metal detectors at the entrances. One of the world's largest economic organisations is meeting in Cape Town from the 10th to the 12th of June 2009. Justmoney will be there reporting live on Twitter so come follow us. The Meeting is designed to look at a panalopy of economic issues that will affect your personal finance. You can still vote to put things onto the agenda. Justmoney is supporting:

• Greater bank charge transparency
• Access to credit, and
• Technology innovation

All of the topics and many more can be voted for by the public and then these will be brainstormed this afternoon the 10th of June between a quarter past one and a quarter to three. So vote now and let the debate be shaped by your concerns. The meeting is fairly high tech with social media applications in place. You can download photos and there will also be a live webcast. Justmoney will be on Twitter and the official Twitter account for the meeting will also be tweeting under the hashtag #Africa09.

One of the economic barriers in South Africa is the relatively large bank account charges that we have here. Compared to international norms we are paying way over what we should be. Institutional problems like this take a long time to resolve as the status quo is entrenched and the culture of high bank charges has already been accepted by the public for so long. Opening up true competition in the banking sector will be a boon for peoples personal finances by actually making it easy to swap your financial services provider and keep money in your pocket instead of just charged away.

42% spend more than R200 a month on bank charges!

42% spend more than R200 a month on bank charges!

If you spend more than R200 a month on bank charges you are amongst the majority. This is the outcome of a recent survey conducted on South Africa's online guide to money, Justmoney.co.za.

The online money portal asked its users what their total monthly bank charges added up to and 42% of the more than 1500 respondents polled said that they spend in excess of R200 a month - an amount that has Justmoney's General Manager Andy Gilder questioning South Africans approach to banking.

"I find it astonishing that the majority of our users are paying fees this high on their bank charges, but I think it has as much to do with their own apathy as the high costs associated with banking in this country."

"Last month, we asked our users what they looked for in a bank and their response was unanimous - they wanted lower bank charges. A month later we ask them how much they spend each month and the results are exceptionally high - these high fees have got to come down to users not being actively involved in getting to know the costs associated with basic transacting. Granted, we pay more for basic banking services than many other parts of the globe, but for an average bank account holder to shell out more than R200 a month seems exceptionally high."

Gilder goes on to say that it has also got a great deal to do with the perceived difficulties associated with moving banks - saying that even though South Africans are aware that they are spending too much money on their monthly banking they are not prepared to do something about their concerns.

He points to movements within the industry that are helping to alleviate the issue, but maintains that it is up to the consumer to make the intelligent decision.

"While no bank will ever make it entirely straight forward for a customer to leave them, what we are now seeing is that banks are making it simpler to move over to their services. Some banks now offer joining incentives like free, unlimited debit order set ups and a far easier application process - some have even gone so far as to offer cash incentives for opening an account. "

Justmoney.co.za asked its users "How much do you spend on bank charges each month?" and the results were as follows:

42% said: More than R200

16% said: between R150 and R200

19% said: between R100 and R150

23% said: less than R100

Gilder says South Africans need to become more involved in their finances and make an effort to cut unnecessary costs whenever possible.

"If you aren't already doing it, one of the most cost effective things you can do to lower your bank charges would be to transact online, and if you don't have an Internet connection, use a mobile phone. Standing in the bank queue is not only time consuming, but expensive. Banks are looking to the Internet to decrease their own admin costs and as such are rewarding South Africans for banking on line rather than in branch. Inter account transfers online are free - in the branch the same process can cost you in excess of R20 - its simply throwing money away."