Spring clean your finances

A3blWith just under four months to go until the silly season, it would be wise to spring clean your finances by removing the proverbial cobwebs and dust.

You may be wondering how this can be achieved. Well, in much the same way you might spring clean your house, room by room, in this case you can do it debt-by-debt.

Spring rule # 1

If you have debt, and unfortunately a lot of us do, make sure you first pay off the debt that accumulates the highest interest rate.  Make the effort to pay more than the minimum payment. This reduces the capital instead of merely servicing the debt and prolonging the length and cost of your loan. 

Spring rule # 2 

Cut up those store cards! Cash is king and, once you’ve paid the accounts, you’ll have the freedom to buy from any shop you choose.  Budget to buy a few items of clothing each month and shop around for the best deal. 

Spring rule # 3 

Once you’ve serviced your debt – save, save and save as much as you can for those rainy summer days.

Did you know that in 2015 the Government will be implementing a new savings initiative aimed at encouraging households to save more money? The current low savings rate of South Africans is alarming, but this tax-free saving incentive is sure to motivate many people to save more.

The incentive will allow you to save an amount of R30,000 per annum with all investment returns being tax-exempt. This is limited to a lifetime amount of R500,000 per person and is a welcome enhancement to the existing interest exemptions and capital gains exclusions available to investors.

We encourage you to make use of this incentive. Please contact us for information on how you can benefit and make the most of your savings.

Spring rule # 4 

Create a budget. If you have a budget, make sure to prune it wherever possible by removing the items you no longer need or that you can live without.

By following these easy steps you will have prepared your soil to welcome green shoots and ultimate financial health and empowerment.

Have a happy, frugal and healthy spring!

GemmaGemma De Luca
Paraplanner & Fiduciary
gemma@fpm.co.za
0861 111 376

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.