Make the most of that paycheck! Getting through the recession

Onalenna Disipi, a Certified Financial Planner with Discovery, explains that a recession affects an individual's future potential income and spending power because a recession often signals weak wage growth, retrenchments and tax hikes.

"For consumers, a recession means that they will need to make careful decisions about what they spend their money on. People with a lot of debt should make paying off debt their biggest priority and using any disposable income to build up a savings buffer," Disipi says.

Consumers should also be wary of making any knee jerk decisions about their investments, savings and further debt. Knowing your financial status is key:

1. Budget! Budget! Budget! Don't just budget for your 'static' expenses like your bond repayment or insurance premium, but also what you spend every day. The daily coffee or weekly magazine can easily add up to a few hundred ran every month. If you're not getting by and you don't know what you are spending your money on, start by recording what you spend every day for a month. You will quickly see where your money is disappearing to.
2. Face your debt and be honest about exactly how much you owe. This includes your bond, car loan and short-term credit such as credit cards, personal loans and store cards
3. If you have short-term debt, work out a plan to tackle the biggest debt with the highest interest rate, first. Pay in any extra amounts you can afford. Don't buy anything further on your credit or store card.
4. If you have paid off a store or credit card, you can use that extra cash to pay into your bond or build up an emergency savings fund.
5. Don't cash in on your investments to support your lifestyle. Rather find clever ways to change your lifestyle to still enjoy the things you love, but without spending more money.
6. Don't make unnecessary purchases like a new cellphone or new car unless you really need it. Change your attitude about what matters - if you focus on experiences rather than buying the latest gadgets or items, you might gain more in the end.
7. Make sure that you have adequate insurance and medical aid - most people underestimate what cover they would need should they get ill or be unable to work. Speak to a financial adviser and get the basics sorted out.
8. Most financial providers and retail stores have loyalty programmes that offer valuable benefits. Spend a bit of time to figure out where you could save or get cash back.
9. Make a point to always have some cash left over in your account at the end of the month, even if it's just R100. In that way you will build up a good savings buffer. You will also get into the routine of delaying your spending - a good habit to have!

Disipi also advises that taking the time to speak to an experienced financial adviser about your financial future and goals, is a good idea, "Often we don't want to think about our money situation and we procrastinate getting solid advice. But the sooner you can get a sound financial plan, the sooner you can start building the financial future you want."