This January, don’t fall for the “on sale” signs! The first sale sign you see is not always the best deal available. Most times, the prices are doubled! Retailers use the festive period to cash in and consumers end up paying twice the price they would normally. They trick you with too good to be true promotions like buy 2 get one free or buy now – pay later. The question to ask yourself is, if I only need one, why should I buy 2? If I can’t afford it now, why do I think I can afford it later? Is it a financially viable option?
28 November 2012
Do you want to start saving but are not sure how to? DebtBusters offers all the tricks to get you into the savings habit and make sure it stays that way…
The consensus is to start small. Luke Hirst, MD of debt experts DebtBusters, suggests that you save 8 percent of your net income, but maybe that’s a tough goal. Don’t give up just because you can’t save that much. Starting a savings habit and saving consistently is the key objective.
1. Start with something you know you can live with, perhaps a few hundred Rand a month.
2. If your company doesn’t have a compulsory retirement plan set up, ask them to set up a voluntary plan for you. The money taken off your salary every month will soon go unnoticed.
3. Keep an eye on your ATM withdrawals. A great way to do this is to decide how much you will take out each week and make it last. Make it a little tight and attempt to decrease it over time if you can. If you have money left at the end of the week, put it into your savings account.
4. Pay off all your credit and store cards. Begin paying extra every month on the card with the highest interest rate. When it’s paid off, move to the card with the next-highest balance.
5. Set up a long term investment plan. You can have as little as R150 a month debited from your bank account and deposited into a unit trust fund.
6. Once you’re on the right path to being savings savvy, it’s time to think about how to earn a better return. One simple way to do that is to take some money from your bank savings account and invest it into at least two different unit trusts. The funds you decide on will be determined by your risk profile. The higher the risk the higher the possible return.
7. Re-evaluate your insurance policies at least once a year. You may be paying for services you no longer require or paying into non-performing investments.
8. Negotiate. This is the key. Do not just accept the terms of certain agreements. You have the leeway to negotiate before signing certain agreements.
9. Save for a rainy day. A rule of thumb is to always have three months of your salary in a savings account to avoid any unforeseen circumstances. Sticking to this will also give you financial peace of mind.
10. And finally, account for your money by budgeting. People who know where their money goes spend far less and save more. Keep a little notebook with you to record your small cash purchases as these do add up.