“Financial freedom is not about how much you earn but rather about how you spend what you earn.”  

We celebrated Youth Day on the 16th of June 2021. Teaching our youth about money is undoubtedly one of the best gifts we can give them.  Teaching our children money management skills can equip them to exercise control over how they spend their hard earned money and teach them how to provide themselves with a degree of comfort and security that they may not have otherwise had.

It is our experience that clients who are fully aware of their income and expenses experience the least stress and have the most savings.


The first step to understanding your spending habits is to set up a “budget” where you can record your income and expenses.
An up-to-date budget helps you to:

  •         Ensure that you are on track with meeting your goals;
  •         That you are not over spending (spending more than you can afford);
  •         Plan for your retirement;
  •         Plan for unforeseen and emergency expenses;
  •         See where you might be wasting money every month.


Setting up a budget does not have to be complicated. Our Southwood Budget Calculator is available for download here:  https://www.southwood.co.za/budget-calculator-disclaimer

Our calculator allows you to update expenses with any changes 12 months in advance and automatically calculates everything for you. It is important to include every expense so that you get a real picture of what your expenses are.

Initially, it will take some time to put all your expenses together, but after that it just gets easier.

If set up correctly from the start, it is easy and quick to update the figures at the end of each month. Check your bank statements on the day that your debit orders come off and enter the exact figures paid. After all debit orders and payments have been made, the amount left in your bank account should balance with your other expenses such as fuel, food and leisure activities, that still need to be paid for throughout the month.

We tend to think that we will save what is left after all our expenses have been paid but saving should be part of your monthly budget.  Scale down on lifestyle expenses your budget does not allow for and that you cannot afford.

Once you start a budget, you will feel so much more in control of your finances.


  • After drawing up your budget – check it monthly.
  • Schedule all debit orders to go off on the same day.  This will prevent you from forgetting about any expenses.
  • Do not estimate expenses – use the correct amounts.
  • Check your bank statements against your budget every month. You will be surprised to see that sometimes fees are adjusted without your knowledge, for example bank charges.
  • Be aware of when your monthly debit orders have their annual increases and record them in your budget.
  • Plan for the unknown.  Open an emergency fund for unforeseen expenses.
  • Save monthly for your annual holidays.
  • Your retirement provision must be part of your monthly budget and must be at least 10% of your salary.
  • Saving for retirement takes precedence over lifestyle expenses such as homes, cars and vacations. You want to ensure that you can maintain the lifestyle you are living now when you retire.
  • Provision must be made for your family in the form of life insurance, disability cover andsevere illness cover.
  • Short-term debt like credit cards, bank loans and clothing bills are your enemy. If you cannot buy it in cash, you cannot afford it.
  • Be aware of where in your budget you are wasting monthly.
  • Put a little aside for donations and gifting.
  • Plan ahead for foreseeable once-off expenses that you are aware of and cutdown on other items to make provision for it.
  • Get a healthy balance between living now (lifestyle), paying off debt and saving for retirement.