10 Totally doable money resolutions
Last updated on 12th December, 2018 at 08:58 am
Here are 10 totally doable money resolutions from our experts to set you up for a financially successful new year!
As we look forward to the new year, we celebrate 365 fresh opportunities to do better and reach our financial goals! Not sure where to start? Craig Williams (financial planner), Karen Bongers (risk expert) and Nicki Blignaut (senior financial planner) are here to give you 10 achievable money resolutions to set you up for a great new year, and beyond.
1. I’ll find an accountability partner: my financial planner
Your money is one of the most important areas of your life – why not trust an expert with it? Requesting a financial planner visit will help you set long- and short-term financial goals as well as provide you with the trusted advice you need to achieve these.
“Having a financial planner will help you create a custom plan that’s suited to your needs,” says Williams. “It’s like having an accountability partner who will help you stay committed to reaching your goals,” adds Blignaut.
2. I’ll create a budget that works
Having a budget and sticking to it is the best way to keep track of your finances as well as avoid debt. “The trick to creating a budget that works is being realistic – clearly outline all your expenses (yes, even your bank charges) and pin these against your net income,” says Williams. Your budget should also include an amount you have set for ad hoc costs or smaller unexpected expenses. Click here to download our free budget spreadsheet.
Taking care of family members can also be a financial challenge, pushing others into debt in order to meet their family’s needs. “Mitigate this by being honest and communicating your financial position with your family so they are aware of what you can and can’t afford,” suggests Blignaut.
3. I’ll consider a Unit Trust
Having a unit trust is one of the best ways to help you grow your money and prepare for the future. “It’s an affordable and convenient investment option that allows you to tap into investments likes shares and bonds that otherwise would have been out of your reach,” shares Blignuat. You can start a Unit Trust with as little as R500, allowing you to gain access to investing if you are new to the world of stocks and markets. Speak to your financial planner for information on how you can get started.
4. I’ll make saving a lifestyle
Beyond opening a savings account, there are many ways you can make saving a lifestyle. “There are opportunities to save all around us, we just need to actively decide to be savings-driven,” says Blignaut. The trick is in assessing your finances to see what you spend most of your money on, for instance if you spend a lot of money travelling to work, are there car-pooling opportunities in your area that you can maximise on? If you spend a significant amount of money on entertainment, start looking into 2-for-1 deals or plan in advance and take advantage of specials where you can. “Familiarise yourself with your bank statement, to see exactly what you are paying for and query it where necessary,” continues Blignaut.
5. I’ll take out income protection
Your income is undeniably your biggest financial asset and it’s important that it remains protected in the event an accident happens and you can no longer earn a salary.
According to Bongers: “Disability cover is one of the most important covers you can have at any age, as it ensures that you can still earn an income and meet your monthly financial commitments in the event you can no longer work.” Chat to your financial planner for the cover that suits you – it’s often more affordable than you may think.
6. I’ll cover my risks
Your risk elements should cover you from the unforeseen costs of severe illnesses, such as cancer. “Severe illnesses can have astronomical costs. Having comprehensive cover is important as it complements both medical aid and gap cover by paying out a lump sum so you don’t have to worry about medical bills and the treatment costs,” says Bongers. Speak to your financial planner for more information on how you can access the right risk cover for each stage in your life.
7. I’ll set up a rainy day fund
Planning ahead is crucial so you don’t find yourself left in the cold when life’s storms hit. Having an emergency fund can keep you protected from when you need a quick buck to bail you out. “Your emergency fund should typically cover at least three months of your salary,” says Williams. The best way to start building one is by accommodating it in your budget: create a direct debit order (ideally 20% of your salary) as this will help you ensure you stay committed. Make sure you put your savings in an account that you can access as soon as you need the money.
8. I’ll set up TaxTim so my taxes are never a headache again
It might sound like a nightmare of a process, but filing your tax returns is important, not only for your refund but also to avoid penalties for being noncompliant. “The best tip to dodge the ‘taxing’ process of filing your returns is by working on your tax as early as possible; don’t leave it to the last moment,” says Williams. Remember, as a Sanlam Reality member you have free expert help available to you online. Click here to take advantage of TaxTim, which is integrated with e-filing.
9. I will tackle my debt
The best way to maintain a good credit score or boost your score is to ensure that you pay your debts on time. “Start by creating a spreadsheet with all your debt and add in the monthly payments you need to make for each debt commitment,” suggests Blignaut. It helps to arrange your debt from the highest to the lowest interest rates (if you don’t have access to this information, contact your credit provider) so that you can “pay off the debt with highest interest rates to help you pay off the debt quicker and save money,” she adds. Once you have an overview of all your debt, incorporate it into your budget and start making arrangements to pay it off. If you are struggling to meet your monthly payments; don’t default on your monthly payments – “rather meet with your credit provider to negotiate a lower monthly payment rate or workout a payment structure that takes your current financial position into consideration,” she says.
10. I’ll start getting ready for retirement
The sooner you prepare for your retirement, the better your chances of taking advantage of the power of compound interest. Not to mention the tax benefits that come with having a retirement fund! According to Williams: “The bigger your contribution towards your retirement annuity, the bigger your tax refund!”
Visit your financial planner to help you work out an effective retirement strategy and open a tax-free (up to R33 000 annually) retirement fund. “A healthy retirement should cover at least 30 years post-retirement,” he adds. If you already have a retirement annuity, click here to find out if your retirement plan is still on track.
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