NELSPRUIT – Debt. Saving. Retirement. Budget. Expenditure. Do these words sound familiar? Some of us already have sleepless nights when the word money pops into mind.
The year is not even a month old and the petrol price is yet again to increase, cost of living are going through the roof and sadly our income stays the same.
Financial planners, Karen Engelbrecht and Norma Stapelberg gives advice on your most important new year’s resolutions in terms of saving, debt and planning.
“Make 2014 your best year so far by committing to improve your financial security, paying off your debt and saving. With 2013 in hindsight, individuals have already begun to plan their resolutions, and something that should be a priority is ensuring financial security for your future. A new year brings various challenges, often involving unexpected costs, so putting a financial plan in place will increase financial confidence by ensuring individuals are aware of how much is needed to meet their future financial goals, as well as whether they are actually on track to reaching these goals. A budget is a plan on how you will spend your money and also on how you have spent your money. It is a list of your income, and what you spent,” says Smartfin Solutions’, Karen.
According to her, these are the advantages of budgeting correctly:
• It keeps you aware of where your money is going
• It shows you where things went wrong in the past
• It forces you to make considered choices
• It helps you to plan for the future
• It tells you if your plans are realistic.
It’s a common fact that during the festive period, savings and paying off debt is often neglected. While it is easy to be swept up in the hype of holiday spending, a reckless approach to expenditure will also have a disastrous effect on an individual’s savings.
During this period many people have most likely increased their credit limits, pushing debt levels further into the red. “Serious consideration needs to be given to a time when there is no longer a regular income to fund both lifestyle and debt, such as retirement.
Each individual becomes accustomed to a certain lifestyle throughout their working life and without sufficient savings and wise investment decisions, the likelihood of having to downgrade your lifestyle during retirement is extremely high,” Karen continues.
In conclusion, having a financial plan in place, is the first step towards financial security and confidence. The power of compounding means that even a small investment now can have a big impact later.
Norma of Genenis Finacial planners feels that a budget for an individual, like a business plan for a company is good to assist you to guide your money habits. “A budget/business plan should have income expectations as well as expense expectations. Remember – cash is king, “good” borrowing for “investments” such as property helps to build wealth and other borrowing for short term debts should be avoided.”
All wealth creation is important. Retirement funds form part of this as do other investments such as property equities and a successful business.
Norma shares tips to be money wise in 2014
• Instead of having resolutions, make plans that are achievable and measurable
• Perfect a practical plan for attaining your goal. Appoint a financial planner that does not make you feel fear, but empowers you to make decisions
• Find people that know about what you want to achieve and listen to their stories. Choose a mentor that has faith in your ability to succeed
• Establish your alliance, support groups and business connections
• Assess your natural money habits, assess your desire to persist until you succeed
• Review your emotional subconscious thoughts – do they encourage creativity?
• Pay particular attention to your intuition
• Face your fears
• Listen to your own justifications
• Be, do, love in the present moment.
