Make 2018 A Financial Game Changer With These Money Saving Tips

Do you know your financial self?

Have you recently undergone a significant life change, such as having a child? Are you, for instance, expecting to retire in the coming year? Ask yourself some of these questions:

Income
– How much did you make last year, and do you expect that amount to grow? Moreover, can you realistically help it grow?

Expenses
– How much did you spend last year? Did you have unusual expenses? Are your expenses trending in any direction? Do you have a monthly budget? (If not, you should.) Are your retirement savings included in your regular budget? How much cash do you keep for emergencies, and how much do you need? (Six months of expenses is a typical goal).

Assets
– What are your assets and investments, what is their current value, and what portion is liquid? What are some plausible scenarios for investment returns during the year? And are you making maximum use of tax-advantaged investments like a retirement annuity or tax-free saving account? Finally, is your portfolio in need of rebalancing because of changes in your life (such as nearing retirement) or changes in the financial markets?

Debts and credit
– Do you have upcoming future debts (like paying a tertiary education whilst we figure out how “free” education will be implemented in SA) and have you planned for them? Do you have outstanding loans aside from a home-loan? What is your average credit card debt, and do you pay it off regularly? What is your credit score? You can check your credit score and read your credit report for free online within minutes.

Insurance
– Do you have the proper coverage for your family and possessions? Are your premiums reasonable for the coverage you have, or can you negotiate a better deal?

There’s so much you can do including cancelling unused memberships or subscriptions, finding discounts by bundling services or just switching all your bills to online bill payment methods. If you don’t know the answer to these questions or what to do, start with the simple goal of finding them out. This is an important part of setting realistic goals. Don’t be surprised if you redefine or sharpen your goals after performing this exercise.

Start investing
If you really want to start the New Year off right, take your first steps to accomplishing something big with your money. This can be anything from saving up a down-payment for your first home or finally starting a retirement annuity. Whatever your goal, make sure you know exactly what you’re saving for and the specific rand amount you need. Once you know your money wish and its price tag, it’s time to plan your investment strategy. This might be the year you finally make good on your promise to yourself.

Read the full article at: https://www.moneyweb.co.za/mymoney/moneyweb-personal-finance/5-steps-to-financial-independence-in-2018/ 

January 19 2018 By Mduduzi Luthuli, Executive Director of Luthuli Capital for Moneyweb Financial Planning