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A Fin24.com user asks:
In percentage terms, how should I divide my income between spending on my house, car, savings, education and investments?
Dynamic Wealth responds:
Each person has a unique financial profile. Therefore, there is no right percentage division for each spending item. For instance, a retired person should not have any mortgage payments.
The key is to set your goals, incorporate them into a budget and work towards them according to what you can afford.
Affordability will dictate how much you can spend on a house, car, savings etc. It is, however, advisable to save at least 15% of your disposable monthly income.
Remember that if you contribute to a pension fund, it forms part of the 15% and is subtracted from your gross salary.
The amount that you can borrow will be determined by the bank as prescribed by the National Credit Act. As a rule of thumb, your monthly instalments should not exceed a third of your disposable income.
Remember to always stay within your budget and only spend what you can afford. For more information please contact your financial planner, who will be able to do an in-depth analysis of your finances and give you detailed advice.
- Dynamic Wealth is a leading provider of specialised financial services. The group is focused on providing wealth management to high net worth investors, both private and corporate.
Visit Dynamic Wealth's website (www.dynamic.co.za or call 0861 80 2000/3000/4000/1300.
- Fin24.com