Times to take money matters seriously
Though making resolutions to improve your financial situation is a good thing to do at any time of the year, many people find it easier at the beginning of a new year.
Regardless of when you begin, the basics remain the same.
- Get paid what you're worth and spend less than you earn
It sounds simplistic, but many people struggle with this first basic rule. Make sure you know what your job is worth by conducting an evaluation of your skills, productivity, job tasks, contribution to the company and the going rate, both inside and outside the company, for what you do.
Being underpaid even a thousand rands a year can have a significant cumulative effect over the course of your working life.
No matter how much or how little you're paid, you'll never get ahead if you spend more than you earn. Often, it's easier to spend less than it is to earn more and a little cost-cutting effort in a number of areas can result in big savings.
How will you know where your money is going if you don't budget?
How will you set spending and saving goals if you don't know where your money is going? You need a budget whether you make thousands or hundreds of thousands of rand a year.
Credit card debt is the number one obstacle to getting ahead financially. Those little pieces of plastic are so easy to use and it's so easy to forget that it's real money we're dealing with when we whip them out to pay for a purchase, large or small.
Despite our good resolves to pay the balance off quickly, the reality is that we often don't and we end up paying far more for things than we would have paid if we had used cash.
- Contribute to a retirement plan
If your employer has a retirement plan and you don't contribute to it, you're walking away from one of the best deals out there.
Ask your employer if they have a retirement or similar plan. If they do, sign up today. If you're already contributing, try to increase your contribution. If your employer doesn't offer a retirement plan, consider a retirement annuity very seriously.
You've heard it so many times before: Pay yourself first. If you wait until you've met all your other financial obligations before seeing what's left over for saving, chances are you'll never have a healthy savings account or investments.
Resolve to set aside a minimum of 5 to 10percent of your salary for savings before you start paying your bills. Better yet, have money automatically deducted from your salary and deposited into a separate account.
If you're contributing to a retirement plan and a savings account and you can still manage to put some money into other investments, all the better.
- Maximise your employment benefits
Employment benefits such as a retirement plan, flexible spending accounts, medical and dental insurance, etc are worth big bucks. Make sure you're maximising yours and taking advantage of the ones that can save you money by reducing taxes or out-of-pocket expenses.
- Review your insurance cover
Too many people are talked into paying too much for life and disability insurance, whether it's by adding these covers to car loans, buying whole-life insurance policies when term-life makes more sense or buying life insurance when you have no dependents.
On the other hand, it's important that you have enough insurance to protect your dependents and your income in the case of death or disability.
Seventy percent of South Africans don't have a will. If you have dependents, no matter how little or how much you own, you need a will.
If you are one of the people who don't keep good records, you're probably not claiming all your allowable income tax deductions and credits.
Set up a system now and use it all year. It's much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.
For More info on how to start saving contact Magda on
mbosman@oldmutualpfa.com
http://financialadvicesa.blogspot.com/
http://mbosman.findanadvisor.co.za/
Original Aricle
http://www.businesslive.co.za/Feeds/sowetan/2011/01/18/times-to-take-money-matters-seriously
