If your finances are giving you nightmares and you’re not sure how to budget in 2025, you’re truly not alone. The country is experiencing tough economic conditions that are impacting everyone. From 2020 to 2024, food prices skyrocketed by a whopping 50%, despite some production costs declining. To keep the lights on, Eskom pricing is increasing, and medical aid costs are increasing way over the general or suggested inflation while chronic conditions have more than doubled in 15 years.
If these statistics are giving you heart palpitations, we’re here to hold your hand with these tips on how to structure your salary so that you have some wiggle room. “I think my approach is very much ‘we want to be smart with our money, but we also want to enjoy life’,” explains Carla Venter, charted account, investment professional and financial education YouTuber. “There is a way to do this,” she says. Here, Venter shares her knowledge on how to budget in 2025.
1. Time to get real
“There’s this book called The Psychology Of Money, which is absolutely amazing,” Venter begins. “The author, Morgan Housel, says that happiness is defined as the difference between expectations and reality. As in, if you are very real with your expectations, what you want to achieve; what you can afford, you’re more prone towards happiness.”
On the other hand, Venter says, if you have a lifestyle you’re imagining (“which is so easy these days because of Instagram”), you’ll never be happy because you’re constantly trying to keep up with those unrealistic expectations. And because money is intrinsically linked to our hopes and dreams (because it enables them), rethinking your relationship with finance is an important first step. “How can you reimagine what a happy holiday looks like and how can you bring that within your reach and redesign it in your mind?” she says.
Finance books to level up
by Morgan Housel
2. Talk about it
Yip. If your money involves other people (kids, your partner or family), Venter says it’s a great idea to communicate clearly and be honest. “I know money is usually a topic that people don’t want to talk about,” she says. “But I’m very much pro open conversations. I think people don’t want to be upfront about having different goals – but the more you talk about this, people are going to have so much respect for you.” Other members of the family might want to be involved, too and having a collective goal might make things easier.
READ MORE: TikTok’s Loud Budgeting Trend Is What Your Wallet Needs, Say Financial Experts
3. Take your wins
Not every financial goal needs to be gathering thousands of Rands over a few months, or creating a huge investment portfolio. Like tip number one, being realistic can actually spur on the feeling of a win. “It’s not always [about] investing, because it’s not within everyone’s capabilities at this moment,” Venter explains. “Not going into debt is also a massive win.”
You know the urge to drop your credit card for something flashy that feels important but maybe isn’t? Question that, says Venter. “We feel like credit is so easily accessible and consumerism pushes this, ‘it’s so easy to pay on account’ message.” But avoiding debt is always a good place to be. “Make a conscious choice for 2025 to get off that dreadmill and start investing in yourself,” she adds.
4. Re-think what’s meaningful
Everyone has a month that’s a nightmare for their finances: it may be school fees or an emergency, but sometimes it’s just a whole lot of birthdays. For things you can control, rethink gifting. “Find different ways to celebrate,” suggests Venter. “My husband and I have this Little Red Book that we write in every Christmas. Every Christmas time, it’s our time to reflect on the year that passed and the year that’s coming. I couldn’t even remember what I got for him for Christmas last year, or what he got me, but that book is such a valuable thing for us because it reflects our life journey.
That’s an example of something that you can get someone that is very valuable, that they will remember and use and that doesn’t cost that much.” It could be a handwritten card, a notebook for goals or anything else that feels personal and meaningful.
READ MORE: How To Navigate Tough Financial Times
5. Use the 50/30/20 principle
We avoided the word “budget” – “people hate the word budget because it screams admin and unachievable,” says Venter – so think of this as a guideline for where to allocate your money. Per Venter, here’s how to budget in 2025:
- Spend 50% of your money on surviving (food, car instalments, bond).
- Spend 30% on luxuries (saving for a holiday, eating out, buying gifts).
- Use your 20% to pay off debt or invest.
“I think that 20% is so important,” says Venter. It chips away at outstanding money that only increases in interest with time. But allocating a set 20% creates a parameter with an end date which will eventually lead to a free 20% you can use to invest, she says. “Setting those parameters for yourself is important so that you don’t feel guilty if you buy something nice. It’s the money you can use to do your hair and not feel guilty because it’s within your allowance.”
6. Invest the change
“That’s something that I really want to encourage people to do, which is start investing,” Venter states. “Because that’s the only way that you can start building wealth, and you have to get your money to grow without you physically working.”
READ MORE: How To Hack Your Money Mindset And Unlock Growth
7. Learn about your options
Investment options, that is. One of the biggest misconceptions Venter sees in her work is that people think investing has to start with a large lump sum. And, since it’s so much more difficult to find R5k to invest, people tend to stash money away in a savings account that yields little to no interest. “A common mistake that I see people making is holding money in a savings account because they feel that a savings account pays interest and it’s safe, and they know that they’re always going to have that money,” she says. “There’s a big lack of education around stock market investing. You have to educate yourself enough to be ok with taking the risk of investing in the stock market, because that is ultimately where you’ll get the best growth in the long term.” While stock markets fluctuate, in the long term, it grows much more than a savings account, explains Venter.
And, contrary to popular belief, you don’t have to start with the equivalent of your bond’s down payment. “If you have R100, you can invest in the stock market. It’s not exclusively for wealthy people.”
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