Great achievements start with a plan. A financial plan that will help you reach your personal and financial goals is well worth the effort. Nelisiwe Ndlovu, Associate Consultant at Alexander Forbes Financial Services recommends that kick off 2016 off to a good financial start by:
1. Knowing your finances: let this be a ritual where you know exactly how much money is coming into your account and how much of your income is financing bad debts such as clothing store cards, loans and hire purchases.
2. Now that you know how much debt you owe, you can start on your plan to pay it off. Always pay off higher interest debts first.
3. Start thinking about your financial goals: Do you want to save more for your retirement, a deposit on a house or maybe start saving for your child’s education? Write down these goals and estimate how much you want to save each month to reach them.
4. Review your risk policies, you might find that you are over-insured and would then need to cancel those policies which in turn saves you money.
5. The younger generation should make sure that their risk cover is escalating to keep up with their growing assets and liabilities. As you grow older your wealth also growths, hence your assets and liabilities are bound to grow.
6. If you have children, open a savings account to set aside money for the holidays as well as plan ahead for school fees and uniforms.
7. While you plan your holiday keep your financial plan in mind. Reassess your decision to go on holiday if you are falling short of your saving target.
8. If you receive a bonus first pay off any outstanding debts and then put extra money into a savings account.
Invest in a Tax-Free Savings Account. It is a simple, flexible, affordable investment that you could use to save for a goal. You can save up to R30 000 a year and R500 000 over your lifetime tax-free. You should leave your money for the long-term to benefit from compound interest and increase your tax saving.
