The much-awaited new year has finally greeted us and many of us hope for breakthroughs to build a secure financial future. If you want a fresh start and an opportunity to correct the financial mistakes made, this article is for you.
I remember when I started my career over 10 years ago how much I used to overspend. It was so bad that I had to ask my best friend to keep my bank card for me in an attempt to refrain from splurging. However, circumstances over the years, including resigning (because of the toxic work environment) and even getting fired at some point, forced me to be disciplined with my money. I must say, I am proud of the progress I made, including having a budget book every year to help me track where my money goes, as well as saving a portion of my salary for those rainy days. Creating a budget and being realistic with your income is important to be financially fit. I have learnt to also avoid eating out regularly and carry my own lunch to work, which saves a lot of money. I am now on a journey to find investment options that will help grow my money even further, but until then, I will make use of financial experts to help me improve on my financial habits. Ester Ochse, product head, FNB integrated advice, has the following tips for us:
- Setting up automatic payments for expenses: Setting up automatic payments for bills can help you save money by reducing late fees and penalties. It also ensures that payments are made on time, which can help you maintain a good credit score.
- Utilising budgeting tools: Using a budgeting tool can help you stay on top of your finances and track your spending. This can help you save money by helping you identify areas where you can cut down on unnecessary spending and redirect that money to savings.
- Opening a high-yield savings account to save for an emergency: A high-yield savings account can help you earn interest on the money you save. This can help you grow your savings over time, assist when there is an emergency and can be a great way to save money. Given that inflation is increasing, look at appropriate savings vehicles that can help you save or invest. Short-term savings accounts help you contribute monthly through either immediate availability or seven days. Having these savings accounts will help you better manage any emergencies that might creep up as life happens. A good rule of thumb for emergency saving is to have one to three months of expenses saved.
- Taking advantage of rewards programmes: Taking advantage of rewards can help you save on things like groceries, travel, and dining.
- Take advantage of tax-free accounts: A tax-free investment account allows you to invest up to R36 000 a year without paying any tax on the returns. The returns you get from the investments held in the tax-free account are not subject to income tax, capital gains tax, or dividend withholding tax.
How are you planning on improving your finances this year? I’d love to hear in the comments below
