As we prepare for the new year, it’s a good time to think about how we handle our money.
The new year can be a fresh start – a chance to make decisions that can make a difference in our lives, especially regarding our finances.
According to Sarfaraaz Hamza, CEO of ezDebt, financial success doesn’t happen by chance – it starts with a clear plan.
Hamza says: “Now is the perfect time to set personal financial goals. Whether you want to pay off debt, build your savings, or invest in your future – every goal becomes more attainable when a plan is attached to it.”
Here are Hamza’s financial tips for 2025
1. Evaluate your financial health. Ask yourself:
- How much debt do I have?
- What are my monthly expenses versus my income?
- Do I have an emergency fund for when the unexpected hits?
- Am I saving or investing for the future? If so, is it enough?
2. Set SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) financial goals, as opposed to random or unrealistic ones
- Specific: Instead of saying, “I want to save money,” say “I will save R500 a month so we can go on holiday in December 2025.”
- Measurable: Track your progress regularly so that you know sooner rather than later if you veer off-track
- Achievable: Be realistic about what you can afford to spend and save
- Relevant: Focus on goals that align with your priorities. For example, If you know that your child is going to university in 2026 and you don’t qualify for NSFAS, start saving for that.
- Time-bound: Set a clear deadline to stay motivated.
3. Prioritise your financial goals
Not all your financial goals are equal. Prioritise them based on urgency and importance.
- Short-term goals (6-12 months): Build an emergency fund and pay off credit card debt. Or commit to seeing a registered debt counsellor if you see that you aren’t coping with your debt
– Mid-term goals (1-3 years): Save for a wedding or a down payment on a home.
– Long-term goals (3+ years): Build a retirement fund.
4. Create a budget that works
- To have a budget that works, you need to be truthful about it and stick to it. Make the effort to correctly record how much you realistically spend, and put that in your budget.
The ideal budget rule is simple: 50/30/20
– 50% for needs (rent, utilities, groceries)
– 30% for wants (entertainment, travel)
– 20% for savings and debt repayment
But the above model is wishful thinking for most South Africans, who spend the majority of their disposable income paying off debt.
5. Make a conscious effort to pay off your debt
- You can use the “debt avalanche” or the “debt snowball “ methods.n The debt avalanche method involves making minimum payments on all debt and using any extra funds to pay off the debt with the highest interest rate.
- The debt snowball method involves making minimum payments on all debt, then paying off the smallest debts before moving on to bigger ones.
- In terms of saving money, a debt avalanche is better because it saves you money in interest by targeting your highest-interest debt first. However, some people find the debt snowball method better because it can be more motivating to see a smaller debt paid off more quickly.
- Become proactive about your debt: Don’t wait until you have missed payments and creditors have started contacting you. Contact your creditors directly about the possibility of restructuring (making arrangements) on your debt repayments.
- Contact a debt counsellor if you don’t feel up to dealing directly with your creditors: There is a NCR-regulated fee attached to this. When you are drowning in debt and being harassed by debt collectors all day, it impacts your work and home life. You might not even know what you owe to who, and what your options are, especially regarding having your monthly debt instalments lowered. Registered debt counsellors take the strain of negotiating with creditors off your plate. There are pros and cons to this debt relief option. Debt review isn’t for everyone but it has helped thousands of South Africans become debt-free. It may not be the targeted solution you need, but it is an option which (if you are struggling with your debt) you should explore.
6. Save and build an emergency fund
- With the rising cost of living, saving isn’t easy – but try. Anything can happen. Life is unpredictable. Build an emergency fund with at least 3-6 months’ expenses. This will protect you from financial shocks like job loss or medical emergencies.
7. Work on your credit report
- If you still need access to credit for a home, a vehicle, or business finance – then work on building your credit score and fixing your credit report. You are entitled to one free credit report from every credit bureau once a year. Get it.
Hamza goes on to say: “2025 holds endless possibilities.
“By setting personal financial goals now, you’re taking the first step toward financial freedom.
“The key is consistency. Even small, consistent actions can lead to big results over time and the willingness to reach out to financial professionals if you need help.
“We need to get out of our ‘victim mentality’, get rid of our debt and develop a financial growth mindset. Let’s build a community focused on financial success in 2025 and beyond!”