- Keep it simple:
The financial industry can be complex- filled with technical terms and jargon that can be overwhelming for those who are not familiar with it. Don’t overcomplicate your finances with structures and investment vehicles when starting out. Only branch out when you start feeling comfortable with what you already have, and you have the means to justify complex planning.
- Set goals and stick to the plan:
Setting financial goals helps you clarify what you want to achieve in your life. It allows you to identify your priorities, whether it’s saving for retirement, buying a house, paying off debts, or funding your child’s education. With clear goals in mind, you can focus your efforts and resources towards achieving them.
Goals provide the motivation needed to stay committed to your financial plan. They serve as reminders of the rewards and benefits you’ll reap by achieving them. When faced with financial challenges or temptations to deviate from your plan, having well-defined goals can help you stay on track and maintain discipline.
- Build a buffer:
Keep at least 3 months’ salary for unexpected costs like car/home maintenance and loss of property. This will ensure that your need for credit card spending is reduced.
- Filter through the noise:
It’s important to seek out credible sources of information, such as reputable news outlets, financial analysts, and economists. Avoid sources that are known for sensationalism or conspiracy theories. Try to look beyond short-term fluctuations and focus on the broader economic trends. Keep in mind that the global economy tends to go through cycles of growth and contraction, and fluctuations are normal. Be aware of the “financial experts” around the braai.
Living in the now is impossible without thinking of the future. If you follow your financial plan and stick to your budget, you’ll feel less guilty about living in the now. Balance can be achieved between enjoying a good bottle of wine and saving for a rainy day.
Ruvan J Grobler RFP™ (PGDip Financial Planning)