*This content is brought to you by Brenthurst Wealth
By Lloyd Uren*
If you are unsure how to manage your finances ‘properly,’ it often helps to think about how a business or brand would go about making and hanging onto money. A thriving business does not appear overnight, nor does financial security. Success comes from smart decisions made consistently over time – balancing careful budgeting with growth opportunities.
Just like a business, your financial situation will go through good times and bad, but what matters is having a plan that keeps you on track no matter what. That means managing costs wisely, investing in the right areas, and always looking for ways to increase your income.
Budgeting is king
A well-run business does not cut costs randomly. It trims expenses that do not add value while ensuring the essentials remain intact.
Many people think saving means sacrificing enjoyment, but that is not true. Small luxuries – like your morning coffee or dinner with friends – are not necessarily the problem. Instead, the real budget killers are often unnoticed. Unused gym memberships, forgotten subscriptions, and excessive banking fees quietly eat into your finances.
Smart businesses audit their expenses, and you should, too. Reviewing your bank statements and identifying these wasteful costs can free up cash without making your life miserable.
Did someone say side hustle?
While controlling expenses is important, no business thrives by cost-cutting alone. Revenue growth is just as vital. For your finances, that means finding ways to earn more.
Some businesses expand by launching new products or reaching new markets. You can do the same by developing additional income streams – asking for a raise, freelancing, consulting, or even turning a hobby into a side hustle.
The more you increase your earnings, the less you rely on extreme cost-cutting to build wealth.
And once you have cut those costs, you can put that cash to good use. The best-run companies reinvest profits to fuel future growth. In personal finance, this means paying yourself first – automatically setting aside a portion of your income for investments before you have the chance to spend it.
If you have read The Richest Man in Babylon, you will be familiar with this idea: small, consistent investments grow over time through compounding returns, and the earlier you start, the greater the impact.
Seeing the theory in practice
When it comes to growing wealth, the key is not how much you start with but how consistently you invest. Let us look at two simple scenarios.
Let us say you are a dedicated investor who puts away R1,000 a month and earns a return of 8% for 10 years. This would give you around R180,000, of which a staggering one-third (around R60,000) would be interest earned.
If, on the other hand, you have managed to curb your spending habits and found R480 in your budget to invest every month, you would also get long-term benefits. By putting away less than R500 per month, you would end up with around R86,400 – of which close to R30,000 is interest earned!
Finding the right balance
Building wealth is not about extreme sacrifices or chasing unrealistic financial goals. It is about finding a balance that works for you. The best strategy is one you can stick with. Whether cutting back on expenses or committing to regular investments, taking control of your finances today will pay off in the long run.
If you are unsure where to start, a financial planner can help you create a strategy that aligns with your goals and maximises your long-term financial growth. The sooner you take action, the sooner your money starts working for you.
* Lloyd Uren is a junior planner at Brenthurst Wealth Cape Town [email protected]
Read also:
