Spring has sprung, so should your finances
Spring is on our doorsteps, and it’s time to put away the heavy winter blankets and pull out our shorts and sandals. This is the perfect time to add new energy and press the refresh button. Think about it: a cool breeze, your favourite outfit and the warmth of the sun on your skin. Amazing, isn’t it? Now just imagine your finances could make you feel the same way.
When was the last time you were honest with yourself about the health of your finances and took a proper look at your financial portfolio?
Monica Coetzee, Senior Business Development Consultant at Itransact Investment Platform, shares a few ideas on how you can finally let go of the winter woes by spring cleaning your finances.
No, sadly this doesn’t mean go on a “self-discovery” retreat – the first tip, and probably one of the most important, is to get your head out of the sand and face up to your financial facts. Take a good long look at your finances to determine where you are and where you’d like to be. Start with your bank statements and evaluate them closely. Look at your bank charges: are you forking out on unnecessary charges because you’re being careless? Are you making too many foolish – and unnecessary – purchases? Ignorance is the worst position to be in when it comes to your money. Empower yourself.
Let’s start with the basics. Decluttering is important, because it can be difficult to make sense and keep track of your finances if you’re a hoarder and keep every receipt of everything you’ve bought in the past 10 years. Go through any documents you may have – be it in your car, handbag or satchel – and if you don’t need it, throw it away. You’ll probably be surprised by the sheer volume of purchases you make, particularly ones you don’t actually need. Take note of this and let it inspire you to spend more wisely and ‘ask why before you buy’. Don’t part with that precious cash unnecessarily.
Keep it tidy
Keep all your important financial documents in one place – don’t just leave them lying around. Put them in some kind of order: filing them is a good way to be more organised, and it will help you to find important stuff when you need it.
Save it now, you’ll thank yourself later
You’ve probably heard this a million times before, but I can’t stress it enough because, according to the Schroders Global Investor Study 2018, almost 90% of South Africans spend more money than they earn and 58% expect to continue to work for pay after formal retirement due predominantly to financial necessity rather than choice. So why not help ‘future you’ out by not only saving but also planning for retirement as soon as possible.
Pay off your debt and manage your expenses
One of the negative consequences of carrying a high debt burden is that it severely limits your ability to build your wealth. Your income will be directed to three broad buckets or categories: current expenses (paying for things you consume now), debt service (paying for things you consumed in the past) and savings and pension (putting away money for things you will need in the future). When the majority of income is directed towards current expenses and servicing debt, it becomes almost impossible to invest and build a lasting legacy. Focus on paying off your debt and managing your expenses in the short-term so you can start planning for the long-term.
“If you still haven’t gotten the refreshed and energised feeling of spring when you look at your finances, there are financial experts who can help you get into the hang of things and start prioritizing what you should be spending and saving on,” concludes Coetzee.
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