Be Money-wise This Festive Season

The end of the year is quickly approaching and most of us are getting ready to take some time off to relax, see loved ones and celebrate Christmas, but how does one go about doing all of that without breaking the bank? It’s easy, just be money-wise!

So what does that mean? It simply means that you should be wise about the money that’s leaving your account over the holidays. Plan a budget! This is the number one hated thing to do on holiday, especially because you feel like you want to seize the day, take it as it comes and you don’t want to think too hard. After all, you do this all year long, but planning a holiday budget is so vital.

Plan your trip ahead of time, that way you’ll work out the cash flow one time and you won’t have to stress about it again during the holiday. Plan out your petrol costs, toll gate tariffs, food allowance, spending money, Christmas shopping etc on a spreadsheet.

Once you’ve allocated your holiday budget, you’ll know exactly what’s available to spend on what, and you won’t feel guilty doing it. Best of all, you won’t OVER-spend.

Next see if you can cut down on some costs. If you’re planning a holiday with friends or family, put together a “kietie” for everyone. Plan the entire groups basic meals for the week and put your money together to buy everything from one account. This way you’ll save on smaller items that everyone uses like milk, bread, coffee and cereals and no one can point fingers to one another as to who’s contributing what. Do the same for accommodation, lights & water usage or whatever expenses you’ll incur as a group. Buying “bulk” is always cheaper than buying smaller bits of the same thing.

Lastly cut down on excessive and elaborate gift giving. This seems harsh, but chances are that whatever you’re buying for one another will most likely end up in a closet somewhere to be used or worn a couple of times. Give small, thoughtful or useful gifts just as a gesture that won’t break the bank.

Follow these steps and plan ahead and you won’t be left with the anxiety over “Januworry”!

Of course you can say “screw it, we’ll worry about it later” and have the best holiday of your life, but that’s a toxic mentality that will find its way back to you over-and-over again. Be wise, be a smart planner!

The Problem With Money

The biggest problem surrounding money is the lack of knowledge on how to spend and save it!

This is a topic that lies very close to home as it is such valuable knowledge that can literally save you years of heartache, stress and grief.

Schools force learners to take a subject called Life Orientation for their entire school career and insist on teaching pupils skills they’ll never use. Why are we not taking the valuable time we are forcing students to sit down and listen, to teach actual life skills!

Why aren’t we teaching tax in schools? Why aren’t we teaching budgeting, wealth creation and smart financial decision making in schools? We live in a poverty stricken first world country and no one is standing up and helping to grow a new, educated, money savvy generation.

Wealth is a success vehicle that can and should be created as soon as possible. There is no such thing as “later” or “I’m too young”. Parents don’t talk to their children about money and because of that kids grow up to be adults who don’t know what a good salary is, don’t know how to prepare for inflation and don’t have enough to ever retire. The uneducated poverty stricken cycle thus continues.

Let’s make a change! Let’s talk about money, because if you don’t, the next generation won’t either.

Why R500 a Month Is Not Enough

So you’ve spoken to a random financial advisor and you both agreed that putting away R500 a month would be enough of a saving, right? Wrong!

If you are anything like me you have the perception that R500 a month is a lot of money and that over a period of 20 years magical money making fairies would have visited your account a few times and turned your R500 into R5 000 000… Keep dreaming!

The harsh reality is that you are putting away a minimal amount of money into a fund that is only expected to grow between 9% and 12% per annum.

So let’s work that out… (R500 x 12 months) + 9% (let’s be safe here). And the total is R6 540 in savings for the year. Congratulations, you’re a millionaire.

Chances are you’ve put away less for the entire year than what you spend on rent or a bond in one month! Although interest does make your money grow, you still have to make sure that you plan smartly and put away enough so that it grows with your ever increasing lifestyle.

If you truly want to become financially free, make sure you try and get to R1m in savings as quickly as possible. It’s going to be hard and you’ll have to bite the bullet for quite a number of years, but do that and you’ll see how favourable even a 9% growth on your money will be!

Take the leap and invest in yourself today. Ask us how!

The Grudge Purchase

Let’s face it… no one WANTS to buy insurance. If the phone rings and you hear it’s about insurance you usually think of the fastest way to get rid of them. It’s a schlep, you don’t feel like dealing with it and worst of all – it costs money!

We innately don’t want to spend money on things we think we don’t need, or will perhaps never see a return on and that’s what makes it so difficult to invest in.

Make no mistake, it IS an investment. You are investing in yourself to make sure that you will be financially stable no matter what and that your family will not be burdened by your liabilities.

At the end of the day… it’s all in the MIND. You are the one who has to realize that it’s not an endless money pit but that you are buying assurance instead of insurance. Assuring that you have peace of mind when life comes knocking on your door with bad news – and it does happen!

And don’t wait on it either, all insurance companies has a pre-existing condition exclusion. In other words, once you’ve had a condition, you will NEVER be insured for that particular issue again, which is usually when you need it most. So don’t be foolish, follow through on your “grudge purchase”.

You have been warned!

How To Pay Off Debt

Debt is like a snowball effect… You think you have control over it and at first you do, until you don’t. Your debt starts to earn interest and then even your interest has interest and before you know it you can’t seem to get rid of it.

So how do you beat the vicious cycle??

Always start with your smallest debt! It’s the easiest one to get rid of and will give you a sense of accomplishment once you’ve settled it.

Let’s say you’re putting away R350 a month toward a clothing account every month. Instead of just paying the minimum, add another R150 and pay off R500 per month. Keep doing this until you’ve paid off the account and don’t use that account again.

Now you would have an additional R500 per month and 1 paid off account. Instead of saying “I have more money each month” and spending it all, use that R500 and contribute the entire amount to another account you’re trying to pay off. You’re used to not having that R500 anyway, so use it to better your financial situation.

Now instead of paying, say, R1000 a month toward a credit card, pay R1500 per month until that’s also paid up.

This way, your system of getting rid of debt will snowball and free up a lot more cash toward the end of your goal – you’ll also get rid of those pesky interest rates a lot quicker, saving you even more money.

And that’s the basic principle! Start applying it to your life TODAY, you won’t regret it. For more info and a more detailed explanation, please contact us via the blog to speak to an accredited financial adviser.