Reflecting on 2024 for a financially fit 2025
As any adventurer will tell you, in order to plot a path forward, it’s vital to know where you’ve come from. Personal finance is no different. Before you can start planning what you want to do with your money in 2025, you need to reflect on the past 12 months.
2024: The national context
It was an eventful year for the South African economy. Let’s look at five themes that have affected our finances in 2024.
- The government of national unity (GNU)
The formation of the GNU stimulated investor confidence in anticipation of market-friendly policy reforms. The International Monetary Fund and World Bank expect real GDP growth to accelerate over the next two years. - Inflation at a four-year low
Inflation dropped to a four-year low of 2.8% in October, the lowest reading since June 2020. This was due to a moderation in food and oil prices, and a stronger currency. However, inflation is expected to turn in the coming months. Fuel prices have started to inch up in the last two months of the year due to a rise in global oil prices. The rand has also weakened slightly against the dollar after the US elections, due to expectations of lower company taxes in the US and higher tariff structures for some imported products. - Interest rates lower by 50 basis points
Interest rates declined by a cumulative 50 basis points in the second half of the year, providing some relief to consumers. (You can read about how this affects your household here.) Retail trade reflects a resilient consumer market, with 3.2% year-on-year growth in August 2024, up from 1.7% in July. - Equity market still in a bull market
The JSE All Share Index (ALSI) increased 3.2% in Q3. Lower inflation in the US has reduced concerns about a recession and driven optimism about interest-rate cuts, which favours some global equity markets. The gold price is reaching new records by breaching $2 700 per ounce – a 14% increase over the past quarter. Gold is regarded as a safe haven given lingering inflation, concerns about slower growth, and ongoing conflicts, including those in Gaza and Ukraine. Higher commodity prices are beneficial for the South African export market. - More than 250 days without loadshedding
South Africa has experienced more than 250 days without loadshedding as more capacity comes online and management of existing capacity improves. Households, businesses and independent power producers have ramped up rooftop solar installations with total capacity exceeding 5 400 megawatts. Improved electricity provision is expected to support economic growth.
2024: Your personal context
How do you feel about the way you handled your finances in 2024? Did you have a plan in place? What went right and, just as importantly, where did you veer off course?
We’ve drawn up a roadmap for you to reflect on and assess your finances this year. You’ll also find some journalling prompts at the end, if you’re more of a writer than number-cruncher.
- Review your spending and budget patterns
If you haven’t started budgeting and tracking your expenses, make this a priority in 2025. (The Standard Bank App has two handy tools to make this easier: Budget Manager helps you set up and track your monthly budget, and Money Movements automatically categorises your income and expenses to show you where your money is going.)
If you’re already in the habit of budgeting, take a moment to review your spending trends. Are there any patterns that have helped your financial health, or ones that could use a tweak? For example, have you noticed “lifestyle creep”? This is when your income increases and, rather than putting that money towards saving or investing, you spend more on small luxuries and conveniences. Recognising patterns like this can help you be more intentional with your money and achieve bigger goals, like saving for a dream holiday or giving back to causes you care about.
Reviewing your budget and spending patterns not only helps you identify areas where you’ve frivolously overspent, but can reveal legitimate costs that you’ve underestimated (like not taking the latest school fees hike into account). This will help you budget more accurately for these expenses next year. - Assess your investment strategy
Is your money working as hard as you are? Take a moment to review your savings and investments. Are they still aligned with your goals? For instance, if you’re saving in a basic account for a big goal 5 to 10 years down the line, that money might grow faster if invested instead. Ask your banker or financial planner to help you find the best options.
Consider diversification, too. Spreading your investments across different asset classes, industries or even geographies (like investing offshore) is a smart way to protect your portfolio from market ups and downs. Even if one market or asset class falters, the others will balance things out, making sure you don’t take too big a knock overall.
Quick tip: don’t set and forget your investments. A yearly check-in can ensure that your strategy stays on track, especially when your goal or risk tolerance shifts. - Consider your debt management
Think about your debt this year. Did you use debt wisely, like taking out a home loan or investing in something that grows your wealth? Or did you swipe your credit card for things you barely remember buying? Now is the time to weigh the cost of your debt (how much interest you’re paying) versus the value it adds to your life.
The good news? South Africans are benefiting from lower interest rates right now, making it cheaper to borrow money. Use this to your advantage! For example, by paying more than your monthly minimum repayment, you can shorten the term of your debt and save on interest. - Reflect on your legacy
If you’re satisfied with your performance in the previous three sections, it’s time to think about generational wealth. This isn’t only about leaving behind a nest egg for your children and grandchildren; it should include educating them about financial freedom and wealth stewardship too. How did you do this year? Did you actively include your kids in age-appropriate discussions about managing money? Do they know the value of a rand? Could they explain to a stranger what compound interest means?
If you tend to leave the next generation out of your financial planning, think about setting up a family money conversation once a month. Find a way to make it fun (pizza or ice cream will usually get young ones to the table with enthusiasm) and pass on your knowledge about investments, budgeting and legacy planning.
JOURNAL PROMPTS
Scribble down what comes to mind for each of these questions. Dedicate 5 to 10 minutes for each one, and try not to judge yourself as you do this exercise.
- My wins. What were my biggest financial wins in the past year? Which strategies or decisions contributed to these successes?
- My hurdles. What were my most significant financial challenges or mistakes, and what did I learn from them?
- My growth. Did I make progress towards my long-term financial goals this year? If not, what held me back? What adjustments can I make to ensure I stay on track or accelerate my progress in the coming year?