Start changing your money habits with these great tips, and you’ll have more peace of mind in retirement.
Everyone dreams about the perfect retirement – sipping cocktails on some secluded beach, travelling wherever
and whenever you want to as part of your lock-up-and-go lifestyle. But for many, just having enough funds to get through each day will be the most likely scenario. Add to that a longer life expectancy and inflation, and the amount
you’ll really need might have to be doubled – if not tripled.
1. Learn the skills you need to manage and invest your money.
While retirement might be some way off, there’s nothing stopping you from putting plans in place right now. Sit down
with a financial advisor you trust and start mapping out the costs for the retirement you’d like to have, by setting financial goals that’ll help you choose the correct path. Get-rich-quick schemes don’t work so think smartly about your money and the best way to grow it.
Carel van Heerden, chief operating officer at Finbond Mutual Bank, says an investment mix of stocks, bonds, cash
and fixed property should be decided carefully. ‘Always consider your risk appetite, your age, your investment
horizon and how much you have to invest, or are willing to put at risk, before proceeding,’ he advises. The higher
a promised return, the higher the risk will be. Think carefully, listen to expert advice, but make the decision yourself. If
you’re nearing retirement or are already there, fixed term deposits with guaranteed returns are a safer option than
betting on the stock market.
2. Downsize today
Have your kids grown up and left the nest? If you have a bigger home than you need, don’t wait until retirement
to downsize. Cut your costs now, and save the difference!
3. Overhaul your budget
Start by looking to see where you can make savings in your current budget and eliminate unnecessary spending.
‘See your budget as your financial future strategy,’ advises Carel. ‘When you’ve set your budget, be disciplined. All
success comes from being disciplined enough to stick to your plans; saving and spending only what you’ve
committed to is absolute key to making your budget work for you,’ he says.
Look at all your current service providers and review each one to determine whether you can get a better deal
with a competitor.
Review your bank statements. Are there any charges for services you don’t really need or make use of? Look at
things like club memberships and subscriptions. Once you lower your monthly expenses, boost your retirement contributions by the same amount.
A budget, like any planning or strategy, begins with the large goals in mind, but the successful execution is dependent on the day-to-day actions. There’s a great deal of technology available that’ll help you track your budget, use the tools you have and make a success of your savings. — Carel van Heerden
4. Don’t let saving be a choice
Setting a monthly savings allowance shouldn’t be a financial choice, it should be a financial must. Avoid growing or
expanding your lifestyle as your salary grows. ‘There are various banks that offer additional savings pockets, fixed
notice savings accounts and easy-to-use and understand investment options. Speak to your banker or financial advisor and make sure you’re using your money wisely and making your savings work for you. Speak to your advisor about tax-free savings and the tax benefits of investing in certain retirement products that are sure to give you that additional boost you need,’ says Carel.
5. Boost your income
Is there a hobby that you love? Can you turn it into a second job or start a business? Do you have a set of
skills you can use to freelance on the side? Having a second income, no matter how small, is a great way to
funnel extra cash into your retirement savings.
Tip: ‘These days, the world, and especially the internet, is rife with work from home or extra income
opportunities. If you decide to go this route, do your research properly and make sure you don’t fall victim
to scams that will take your money,’ warns Carel.
Don’t skimp on necessities
Don’t cut down on important insurances such as medical aid. As you age, this cover will become increasingly important and you don’t want to be left out of pocket or have to eat into your retirement savings if illness strikes. Evaluate your health needs at the end of each year to make sure your medical aid cover is sufficient. Fedhealth offers a host of options to take care of your medical aid needs through every life stage. Find out more at Fedhealth.co.za
COMPILED BY TARYN DAS NEVES IMAGE: FOTOLIA.COM