Rising fuel and food costs, low economic growth, and the holiday season fast approaching – it’s no wonder that more than half of South Africans are feeling stressed about finances, according to the latest Sanlam Benchmark financial report.
Like any source of stress, anxiety over financial concerns can have a far-reaching effect on mental, physical and emotional health. It can impact your sleep, your work and your relationships, and can contribute to a vicious cycle in which stress causes adverse behaviours which themselves increase stress levels.
That’s why it’s incredibly important to act quickly and effectively to get this anxiety under control, as Denise Neethling, Marketing Manager at earned-wage access (EWA) provider Paymenow, explains. “October is Mental Health Awareness Month, and the pain and impact on our health that stress can cause is top of mind. The good news is that there are several really effective tools available to help you get a handle on your finances, to learn more about healthy financial practices, and allow you to access additional cash safely and responsibly.”
The most important step you can take towards gaining control over your finances is understanding your spending habits. As a first step, keep a spending diary for 30 days. There are some great apps out there, but really all you need is a pen and paper. Don’t overcomplicate things: the idea is simply to understand what’s going where.
Tracking your spending can be a real eye opener. Once you have all the amounts tracked, add up the amounts in various categories (grocery shopping, transport, eating out, entertainment, clothing etc.) You will probably get at least a couple of surprises. Do I really eat out that often? Am I happy spending more on clothes than food each month?
Once you have a better understanding of your spending, it’s time to set some goals in a budget. Again, there are fantastic online or mobile apps that can help you do this (there are even apps specifically aimed at teaching children to budget), but all you really need is a notebook. In your budget you want to be explicit about how much you’re willing and able to spend on each category, in a way that ensures your expenses remain lower than your income.
The more you understand about your finances the better your planning will be, and the less stress you’ll feel. There are incredible resources available to help you learn more about financial planning – free courses, websites, and videos.
Know your credit score
To have peace of mind, it is important to understand your financial credit score – do you have a good or bad score and how will this affect your finances? You are entitled to one free credit report every 12 months so make sure that you know where you stand.
Access to earned wages
Earned wage access helps indebted and struggling workers to change their relationship with their earnings, reduce their dependence on loans, and become financially resilient. It allows workers to withdraw earned wages at any point in an earning cycle, up to a percentage agreed upon by the employer, to meet financial needs or cover emergencies without needing to resort to borrowing.
Paymenow’s multidimensional approach is to both facilitate earned wage access and to gamify in-app activity to help employees learn to manage their money more effectively. “One of Paymenow’s main goals is to encourage responsible financial behaviour, and to break the debt cycle,” says Neethling. “Knowing more about your financial situation is the best way to begin to feel empowered and in control, and Paymenow is pleased to continually increase the amount of information available to our users.”
Having an EWA solution available to your employees gives them a sense of financial security and confidence knowing they have uninterrupted access to their hard-earned cash in case of an unplanned event. Paymenow’s app now provides access to important financial information such as users’ credit scores, allowing even better knowledge of and control over their finances.
As a result, Paymenow’s recent Impact Report revealed that 67% of people using the service had decreased their stress levels since signing up to Paymenow. Four in five Paymenow customers reported improvements in their quality of life because of the service, with just over a third saying their life had “very much improved”.