You want to get there happily and safely, and you want to enjoy the journey. But there are obstacles along the way: potholes that can trip you up and scuttle your best-laid plans.
Life is a highway that leads you to the ultimate destination. Your future. You want to get there happily and safely, and you want to enjoy the journey. But there are obstacles along the way: potholes that can trip you up and scuttle your best-laid plans.
That’s why it’s important to get in gear for a better tomorrow, by making sure that you’re financially roadworthy. Are you in control of your spending? Do you feel financially secure?
For almost two-thirds of South Africans, according to the Consumer Financial Vulnerability Index, compiled by MBD and Unisa, the answer, in both cases, is no.
And yet it is possible to take charge of your money and your life, says BrightRock’s Executive Director: Distribution, Sean Hanlon. As the big holiday season rush gets underway, Sean offers some pointers for avoiding the potholes and staying on track. The key to making your money last, he says, is to “start with what you’ve got”.
If you pack your own lunch, instead of buying takeaways, for example, you could save up to R500 a month. There are many easy to use mobile apps, including the free 22seven (22seven.com), developed in South Africa, that can help you track when and how you’re spending your money, says Sean.
Knowing where your money is going, down to the last cent, will empower you to make the right financial decisions. Identify your priorities, and work hard at digging your way out of debt. Also see Maya Fisher-French’s article on great budgeting tips.
Pay off your highest interest debts, such as store cards and credit cards, as soon as you can. Once you’ve paid off your debts, you can start saving. And don’t forget to set aside some money, ideally equivalent to three months’ salary, as an emergency fund.
Planning is the key to financial security, says Sean. You can save an average of 10% by paying school fees in advance. If you book your holiday early, you can save up to 40%.
If you’re buying a home or car, save as much as you can for a bigger deposit. The smaller your loan or shorter your loan term, the less interest you pay. Taking charge of your finances also means being a savvy shopper. “Make conscious spending decisions,” says Sean. Shop around for the best deal, in-store and online, and negotiate, negotiate, negotiate.
Even when it comes to your medical expenses, you have the right to negotiate with healthcare providers. You can save by asking for a discount – don’t be shy! At the same time, don’t compromise on quality. For some expenses, like brakes and tyres, your mattress and your toothbrush, it’s cheaper in the long run to buy the best.
If you’re fortunate enough to get a bonus, put it to good use. Put money in your bond, pay off debt, boost your emergency fund or add to your retirement savings.
You’re in charge of your money, and you’ve got the power to make it last. But don’t try to do it all by yourself. A trusted, qualified financial adviser can make a wealth of difference. You can check our your adviser’s professional and industry credentials at www.fpi.co.za or www.fsb.co.za.
So here’s all you need to do to get ready for the road ahead:
Start with what you’ve got
Plan for what’s to come
Stick with the plan
Please note: These tips don’t constitute financial advice. It’s important that you get financial advice from an independent financial adviser who is qualified to assist you.