This week our Minister of Finance laid out his budget proposals for the next fiscal year. It was found wanting in many areas. It clearly left the impression that the most sophisticated economy in Africa is in serious trouble. Expenses exceed income in the face of low growth and rising unemployment. There is nothing in our economy to work and so the poem “The Old Woman who lived in a Shoe” aptly positions us for 2020.

So what is your personal budget proposal?                                                                   

So if you had to write up a budget proposal for your next year what should it contain?       Debt – As South Africa is sinking into debt we should be well aware of the debt we are in. Debt has the punishing outcome of robbing you of improving your wealth. 

Savings –If you are not growing you are dying. Saving is a measurement of your growth. It should be above inflation so that you improve your standard of living.

The formula is simple for both the economy and you.

Production fewer consumption= Savings

Savings compounded over time= Wealth creation

Proactive versus Reactive…

A sound financial plan works on being prepared for future life-changing events. There was very little mentioned in the budget about the next potentially bigger problem than ESKOM and SAA…..WATER…..

We need to radically transform our attitude towards conserving and arriving at solutions to provide a sustainable supply of water in the future. If not, ‘The old woman in the shoe won’t be able to make her broth…

The budget proposal should be driven by a strong focus on balancing the allocations in a way that will improve our standard of living. We should avoid the pitfall of using debt as an answer to our financial problems. At the same time, the budget should anticipate the future and aim to protect and improve the lives of the nation. Not appease the short term in reaction to poor planning. The ‘ Old woman’  should be aware at all times of how to keep enough in the cupboard for the children…