(iStock) ~ Fin24
Cape Town - In many ways it’s better to have plenty of time than to have plenty of money, because if you know you have time available you can build wealth and do great things with the money you have, according to Old Mutual.
“Getting good advice early, planning ahead and knowing which stage of your life you’re at gives you a massive advantage," the company said in a statement.
“The sooner you tackle crucial issues like starting to save for your retirement and your children’s education, drawing up a will and getting death and disability cover, the better. The longer you have to save, the more access you and your money have to compound interest."
Start with a financial plan that has these crucial components:
- Set up a monthly income and expense budget;
- Understand the specific needs of the life stage that you are in;
- Choose a financial adviser;
- Stick to the plan. Resist the urge to drop out;
- Review the plan annually with your adviser.
Properly implemented, your monthly budget becomes the driving force in your financial plan. Save for an emergency fund (usually three months’ salary in cash) and to address other financial planning needs.
Just started working? With your first pay-cheque, start saving for retirement regardless of whether your company offers a retirement scheme or fund.
Resist the temptation to cash in your pension when you change jobs – you need to protect and preserve your investment.
Of course you must also protect all your other assets. But while material assets are important, your skills, health and your ability to earn an income are even more so. Your health affects your lifestyle, which impacts your earning ability, which, in turn, impacts your lifestyle.
Despite all precautions, the unpredictable can happen, such as death, disability or illness. It is important to have cover for these events. Disability cover provides you with money if you’re disabled and can’t work.
Do you have a successful savings plan or story, share with us.