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What Is Necessary?

29 September 2020

When it comes to spending money in tough times, we can default to a begrudging ‘NO’. But life is not always clean cut – it’s complex. Is buying an ice cream for our kids more important than our savings?

Sure, little expenditures add up in ways that we are not always privy to. We are the biggest proponents of thinking about and saving for your future, but sometimes we need a little bit of joy in the here and now. While we must make sacrifices, we need to make sure that what we are sacrificing is not the very thing which we are trying to achieve – happiness and success (note that happiness comes first).

The name of the game is balance. Too much sacrifice and we become martyrs, too much indulgence and we become gluttons. In order to find a good balance we suggest a budget.

You may immediately be thinking about a dusty old spreadsheet restricting your expenditures and rigidly telling you what you aren’t allowed to do. On the contrary it should be telling you what you ARE allowed to do. This may sound like silly wordplay, but a budget is about enabling our finances, not restricting them. It is a tool that provides us with security, stability and flexibility.

A budget is a helpful map of our priorities. There are many ways to chart a course across this map, but it helps if we know in what order our priorities lie. Maybe your priority is spending more time with the family or saving for a vacation, or retiring early or escaping the anxiety of debt. Whatever it is, once we are clear on what is important, making financial decisions becomes easier.

Another way of thinking about this is by separating our expenses into the necessary and the nice-to-haves. This is especially helpful when trying to refine your budget in a household with lots of expenses. It allows us to divide our costs without getting too granular, while maintaining a hierarchy of priority.

If you need to set your budget straight, we are here to provide the help that is necessary – let’s meet up and have a chat. Until then, go get that ice cream.

Sanlam Life Insurance is a licensed financial service provider.
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