With most of us having run up our expenses over the festive season, it's time to knuckle down and get our finances back in order... Especially our spending. Here are four tips to help you live debt-free this year...

   1. Make sure all your important debits are set up to leave your bank account the day after your salary is paid in. That way you’ll get the bills out of the way before you start spending.

   2. Have a garage sale. They take a bit of effort but they can be quite fun and it’s a sure way of getting rid of some of the clutter you’ve accumulated over the years.

   3. Don't go food shopping on an empty stomach and never go without a list of what you actually need. You’d be surprised how pushing the trolley around the supermarket while you’re hungry makes you spend much more than you planned to.

   4. Work out if you're better off using your savings to pay off your debt. For example, if you're getting 6% interest on R1,000 of savings but you’re paying a rate of 20% on a debt of R1,000, then you’re losing out. Rather use your savings to pay the debt off. But as soon as you have, focus on saving again.

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6 Reasons why many home-based businesses fail...

1. Bad planning: Before you even think of acting on your business idea, it’s essential you answer some tough questions. Will this be a side-business or a full-time operation? Is your new business going to be a temporary source of income or a growing business for the future? How much start-up cash will you need, and where will it come from? How much time and space will the business require? How much help will you need with bookkeeping, financial planning and other tasks – and how much will it cost?

2. Poor record keeping: Every business, no matter how tiny, needs complete records of all income, expenses, and customers. Remember that many costs – including equipment and supplies, postage, phone, electricity and transportation in pursuit of earnings – can be tax-deductible. The success of your business will depend on the records you keep.
 
3. Lack of advertising or publicity: Spreading the word about your business doesn't require expensive advertising. An editorial article in a local newspaper can do wonders, as can donating a product or service to a local charity auction or even sponsoring a prize for a competition.

4. Unprofessional behaviour: Working from home doesn't mean you can relax your professionalism. Many start-up entrepreneurs miss deadlines, get behind on bills, allow their children to answer the phone, or fail to demand deposits and signed contracts. Don’t let your casual work environment alter the way you operate.

5. Insufficient insurance: A homeowners' policy seldom covers a home business, so make sure you talk to your insurance broker about additional cover. If clients or employees come to your house, extra liability insurance is a must.

6. Setting prices too low: Many home businesses, in their eagerness to acquire customers, charge so little that they earn barely enough to cover costs. Avoid this mistake by researching the cost of similar products and services in your area. Be competitive, but don’t undersell yourself.

Here’s to your wealth and happiness,
 

Pascale Barrow
Managing Editor of Personal & Finance Confidential