September 2026 Finance Newsletter: Smart Budgeting

Any good business owner will tell you that you can only manage what you measure. To manage your finances effectively, you must consider your personal finances like a business, which means you have to measure your income, your expenses and the resulting profit or loss. Like it or not, this means that if you want to manage your money effectively, you have to draw up a budget every month to prioritise your spending according to your long term financial goals. Here are the basics of budgeting:

 

1.    Draw up a budget to plan your year

The first step is to create a monthly budget for your household by tracking your income, expenses, and debts each month. Drawing up a budget helps you plan ahead and make provision for savings, emergencies, holidays, and school-related costs throughout the year. It also allows you to identify areas where you may be overspending on luxury or non-essential items. You can manage your monthly budget using tools like Excel or a budgeting app, which can help you organize your bank statements into a clear cash flow format, generate reports showing where your money goes, measure your spending against set targets, and track your month-to-month progress.

2.    Build up an emergency fund

Make sure that you save an amount to an emergency savings fund every month. Emergencies happen to everyone and failing to plan for them is simply planning to think ahead. Summit’s research has shown that 43% of over-indebted consumers fell into a debt spiral due to not having savings to cover an un-planned for emergency. If you don’t have an emergency savings fund, you will be forced to make debt to pay for emergencies. Ideally, you should have emergency savings equal to three months’ salary. If that seems like a distant goal, at least start by saving whatever you can.

3.    Pay off your debts

If you have debt, make it one of your top priorities to pay off your unsecured debt (credit cards, personal loans, retail accounts, overdrafts) and not to access any more. Use any lump sum payouts to reduce your debt, and stretch yourself to pay even R50 – R100 extra to each account on your monthly budget. You will be surprised what a difference this can make. Your unsecured debt is the first target, as it typically has the highest interest rates, meaning it is your most expensive debt. Once your unsecured debt is paid off, the best investment for your extra cash is to pay more towards your bond. An extra R100 per month on a 20 year bond of R500 000 will cut 1.5 years off your repayment term and will save you R39 000 in interest. A little really can go a long way. 

4.    Save for next year’s school fees

If you have children, you will know that school fees and supplies can make a big dent on your January budget – when you have the least money to spare. Do your future self a favour and start saving up for next year’s school fees. Many schools provide discount for upfront payments, so try to save up enough to make a once-off payment in January 2014 to settle your school fees for the year.

5.    Start saving for Christmas

We all know the dent that Christmas can make in our cash flow for months after. Avoid making debt over the festive season by planning ahead. Start buying your gifts early and take advantage of sales and specials. Also put money into savings each month to cater for all the extra spending, socialising and holiday expenses that go together with the festive season. This will enable you to use your December salary for your expenses and pay for the extras out of savings instead of making December debt.

6.    Conclusion: Take control of your financial future

Smart budgeting is not about restricting your lifestyle — it's about taking control. By planning ahead, saving consistently, and managing your debt wisely, you create financial stability and peace of mind. Whether you're saving for school fees, preparing for emergencies, or avoiding festive-season debt, every small step counts. Treat your personal finances like a business, and you'll build the discipline and resilience needed to achieve your long-term financial goals. Start today — your future self will thank you.

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