September ushers spring as a new season and is a new month. This time of the year is often likened to cleaning up, clearing up and creating space for new things. This includes arranging our finances accordingly. Often at the beginning of the year, people sign up for things such as gym, subscribe to platforms and attach themselves to new debt. Spring is regarded as a time for one to turn over a new leaf and set their house in order, but what does this practically look like?
Amongst the most basic steps one can take to clean their finances is for one filing for outstanding SARS submissions/VAT returns, review their budget, cancelling unused subscriptions and commitments that no longer serve them.
Filing your tax returns
Filing your tax returns can save you money through refunds as well as avoiding penalties where you may owe the South Africa Revenue Services (SARS) money. This is also beneficial for taxpayers who have paid towards medical aid contributions, a retirement saving product, or a tax-free savings account. These are all ways you can begin to savour money that you have “spent” towards contributions in the year. In addition, you can also claim for your Pay-as-you-earn (PAYE), as you are required to pay up to 10% of your salary through PAYE and you can then claim for up to a maximum of 27.5% of your taxable income, with a cap of R350,000 per annual.
If you run a business, being tax compliant through your tax filings is important. This means that you need to ensure that all your tax-related paperwork is in order. As a business owner, you can also claim for Value-added Tax (VAT). This is what you would have paid on most inputs and expenses you have incurred with added VAT.
Cancel your unused subscriptions
At the beginning of the year, you may have set financial goals and some of them you have reached and others you have not. This could be due to a number of reasons, including oversubscribing to platforms such as Netflix, movie sites, joining the gym but not training, and signing up on music platforms such as Apple Music or Spotify you never use. When one looks at the accumulation of how much their entertainment bill accounts to and other unnecessary expenses tally up to, they would be shocked. If you find yourself spending R50 to R100 or more on each entertainment platform yet, you are not using it, which means it is time to cancel the subscription. If you have signed for gym membership and have not gone to the gym no more than three months regularly, then you need to review. Saving R50 or R100 may sound like it is not much when it is in actual fact, that is cash that you could put to good use or save towards something.
There are a lot of expenses that go unnoticed on our budgets, especially when you look at your bank statement. Make reviewing your budget monthly a good habit to adopt. This way, you can plan better for items you spent on promptly as well as items you may not have needed yet overspent on them. This could not only save you money but also help you to budget appropriately for more important things. Align your budget with your priorities and always aim to pay off your debt first, save and invest. This is not the only way to advance your financial goals and financial standing, however, it does improve your financial freedom. Debt is one of the number triggers of stress and once you manage to reduce their debt obligations, builds your savings portfolio, this will free up cash to allow you to invest in different asset classes and help you compound your wealth.
Axcelerate’s Managing Director, Refentse Masha CA (SA) advised that keeping to a healthy and prudent financial status should be a year long process and not only a spring project. “It is important that we always check in with ourselves financially, weekly, monthly, quarterly and of course annually.” This means that we grow in line with our financial goals, added Masha.