Lake Properties Lake Properties
- Assess where you stand (data you must collect).
- Build a budget and sample allocations (three real examples).
- Attack debt (methods + worked example).
- Build emergency savings (practical steps).
- Grow income (upskill + side hustle ideas).
- Protect (insurance, retirement, medical).
- Habits & automation that actually work.
- 90-day, month-by-month action plan (checklist).
- Scripts and resources to negotiate debt or find help.
1) Start by getting a clear picture (the foundation)
Do this first — it takes time, but everything else depends on accurate data.
What to collect (for 1–3 months):
- Net income (every source) and timing (monthly, weekly).
- All bank & card statements (last 2–3 months).
- All recurring bills and subscriptions (groceries, transport, airtime, utilities, streaming).
- All debts: lender, total balance, monthly payment, interest rate, account number.
- Assets (cash, investments, property) and insurance policies.
- One-off/annual costs (vehicle license, school fees, holiday).
How to track quickly:
- Use a simple spreadsheet with columns: Date | Category | Description | Amount | Account.
- Or try a budgeting app — but the method matters more than the tool.
Goal after this step: you can answer “How much money comes in, and where does every rand go?”
2) Build a realistic budget (not a wish list)
Budgeting rules that work:
- Start simple, then refine monthly.
- Use categories: Essentials (housing, food, transport, utilities), Debt payments, Savings, Retirement, Discretionary.
- Automate the savings/payments so you don’t “decide” each month.
Three concrete sample allocations (net monthly income examples):
A. Net R8,000 / month (low income) — practical split
- Essentials 70% → R5,600
- Debt 10% → R800
- Savings 5% → R400
- Retirement 5% → R400
- Discretionary 10% → R800
B. Net R20,000 / month (middle)
- Essentials 50% → R10,000
- Debt 15% → R3,000
- Savings 10% → R2,000
- Retirement 10% → R2,000
- Discretionary 15% → R3,000
C. Net R50,000 / month (higher)
- Essentials 40% → R20,000
- Debt 10% → R5,000
- Savings 15% → R7,500
- Retirement 15% → R7,500
- Discretionary 20% → R10,000
How to customize:
- If debt is very high, temporarily shift discretionary + some retirement into debt repayment until high-interest accounts are under control.
- If income is seasonal, use an annualized budget (divide yearly expected net by 12).
Practical tip: Keep a tiny “fun” line in your budget so it’s sustainable. Total elimination of joy leads to budget failure.
3) Tackle debt (method + worked example)
Two popular strategies:
- Avalanche — pay highest interest first (minimizes interest paid).
- Snowball — pay smallest balance first (helps motivation).
Worked example (assumptions):
- Debts: Credit card R15,000 @ 18% APR; Store account R10,000 @ 25% APR; Personal loan R5,000 @ 12% APR.
- You can allocate R2,500 per month to debt repayment (total across all debts).
- Simulation result (same total monthly commitment):
- Avalanche: ~14 months to clear everything; total interest ≈ R3,139.
- Snowball: ~14 months to clear everything; total interest ≈ R3,619.
- Avalanche saved ≈ R480 in interest in the simulation.
(Those results assume all extra payment goes to the prioritized account each month after interest accrues — actual bank minimums and rules change timing; still, avalanche usually costs less in interest.)
How to apply:
- List every debt with balance, APR, and minimum payment.
- Pay all minimums. Add any extra to the debt chosen by your strategy.
- When a debt is cleared, roll its payment into the next (the “snowball” or “avalanche” roll).
- If you’re overwhelmed, ask about debt review or restructuring from a registered debt counsellor (this exists under SA’s credit regulations) — it’s better than defaulting.
Negotiation & practical moves:
- Call the lender, calmly explain hardship, ask for lower interest, payment holiday or restructure.
- Offer a lump-sum settlement if you have cash and the lender will accept less — get any settlement in writing.
- Avoid consolidation offers that increase fees or extend terms without lowering the total cost.
4) Build an emergency fund — the 3-step plan
Why: avoids selling investments or increasing high-interest debt when something breaks.
Targets:
- Immediate buffer: R1,000–R3,000 for very short shocks.
- Short-term goal: 1 month of essential expenses.
- Medium-term goal: 3 months of living costs (ideal for many situations). If you’re in unstable employment, aim 3–6 months.
Tactics:
- Start tiny: automatically transfer R100–R500 per payday into a separate savings account.
- Use a separate account (labelled “Emergency”) so you don’t spend it. Many banks offer fee-free savings wallets.
- When you receive bonuses, tax refunds or small windfalls, top up your emergency fund first.
Where to keep it: easy access, low risk — a high-interest savings account or money-market style account (avoid locking everything away unless you have dedicated short-term buckets).
5) Increase income — realistic & scalable ideas
Short term (weeks–months):
- Sell unused items (furniture, appliances).
- Tutoring, after-school help, or digital gig work (freelance writing, admin, design).
- Delivery driving, ride services, or local handyman/cleaning services.
Medium term (3–12 months):
- Formal upskilling: online courses or vocational training that lead to higher-paying roles.
- Learn a trade or a marketable digital skill (web development, bookkeeping, social media management).
- Start a small service business (lawn, cleaning, childminding, pet care) with low startup costs.
Long term:
- Invest in education or a professional qualification that materially increases earning power.
- Explore passive income: rental of a room, small property investment (only once core finances and emergency fund are solid).
Practical prioritization:
- First stop debt that’s destroying your cash (high APR).
- Parallel track: small side income + 10–15% of side income goes straight to savings or debt.
6) Protection: insurance, medical, and retirement basics
Priorities (in order):
- Medical cover / hospital plan — medical emergencies can create catastrophic debt. Even a basic scheme can be protective.
- Life cover if you have dependants — enough to cover funeral + short period of support.
- Car & home contents insurance as needed, especially if financed.
- Retirement savings — employer pension/provident and voluntary retirement annuities.
South-Africa specific notes (general):
- If your employer offers a pension/provident fund, try to contribute especially if employer matches.
- Consider a Retirement Annuity (RA) for tax deductions and long-term compounding — but check rules with a tax adviser.
- Keep insurance policies under review (premiums vs cover).
7) Investing (start only after you have emergency cover & manageable debt)
Principles:
- Start small, invest consistently (monthly debit order).
- Prefer low-cost, diversified products (index funds / ETFs) for long-term growth.
- Avoid high-risk “opportunities” or schemes promising huge short-term returns.
If you want safe, early options:
- Low-cost funds, or a beginner investment plan through a regulated platform; keep horizon 5+ years.
8) Behaviour & habits that actually stick
- Automate everything. On payday: pay tax/retirement, then savings, then bills; only what remains is for discretionary spending.
- Weekly 15-minute money review. Check balances and upcoming bills.
- Pay yourself first, even R100 counts. Over time you increase this number.
- Visible goals. Write a 3-month, 1-year, 5-year money goal and place it where you see it daily.
- Small wins. Celebrate when a debt is paid off or you reach a savings milestone — it drives momentum.
9) 90-day action plan (practical checklist)
Day 0 (now): Gather income, bank statements, list of debts, all recurring bills.
Week 1: Make a one-page budget (income → categories). Open a dedicated “Emergency” savings account if you don’t have one.
Week 2: Cut one recurring expense (experiment: subscriptions, data bundle, streaming). Redirect that money to savings/debt.
Week 3: Contact the highest-APR lender — ask about lowering interest, restructuring, or temporary relief if needed. Use the script below.
End of Month 1: Automate transfers: savings, emergency fund, and debt payment. Start a side hustle for additional R500–R2,000/month.
Month 2: Revisit your expenses; push any windfall to emergency/debt. If employer match exists — increase contribution to get match.
Month 3: Rebalance goals: if emergency fund ≥ 1 month, redirect extra to investments or increased debt payments. Review insurance and retirement.
Repeat every 90 days and raise savings & debt payments when possible.
10) Sample negotiation script to call a lender
“Hello, my name is [Name], ID [optional]. I’m a loyal customer but I’m currently experiencing financial pressure. I want to avoid defaulting and would like to discuss options. Can we look at lowering the interest rate, a temporary payment arrangement, or consolidating to a more manageable monthly payment? What documentation do you need from me to consider this?”
If they offer a solution, ask for it in writing and confirm whether it affects your credit report.
11) When to get professional help
- You’re receiving constant collection calls and can’t pay even minimums → consult a registered debt counsellor or financial counsellor.
- You’re facing possible repossession or legal action → seek legal advice.
- For tax optimization and retirement structuring → consult a licensed financial planner or tax practitioner.
12) Quick SA-aware money saving tips
- Reduce electricity & water usage (lower monthly bills).
- Buy non-perishable staples in bulk; use local markets for produce.
- Review cellphone/data packages monthly.
- Make transport choices that reduce costs (car-pool, plan trips).
- Avoid “buy now, pay later” store credit for non-essentials.
13) Final practical checklist (one-page)
- [ ] Track 30 days of every expense.
- [ ] Create the one-page monthly budget.
- [ ] Open a separate emergency savings account and set R100–R500/month auto transfer.
- [ ] List debts with APRs and set a monthly debt repayment amount.
- [ ] Automate pension contributions (or increase to capture employer match).
- [ ] Do one income-boost activity weekly (list 4 ideas, pick one).
- [ ] Re-evaluate after 30, 60, 90 days and increase savings/debt payments by any freed cash.
Short, practical next steps you can do right now
- Spend 1 hour tonight listing income and the top 10 expenses.
- Move R100 (or 1% of net) to a separate savings account today — small action builds habit.
- Pick one high-APR account and call them this week with the script above.
Closing + Lake Properties Pro-Tip
Financial health is not a single event — it’s a set of habits. Focus on: (1) clear data, (2) a simple budget you can follow, (3) crushing high-interest debt, and (4) slow, steady income growth. Small, consistent moves compound — just like property maintenance: consistent patching prevents large repairs later.
Lake Properties Pro-Tip:
Treat your emergency fund like a “rainproofing” cost for your home — you’d rather pay a little each month than cover a storm’s full damage later.
If you know of anyone who is thinking of selling or buying property,please call me
Russell
Lake Properties
www.lakeproperties.co.za info@lakeproperties.co.za
Lake Properties Lake Properties
