Small things make a big difference, especially when it comes to money.
People often ignore their financial situations until it is too late to do anything about it.
Debt, credit cards and bank charges are constant burdens for many, and yesterday FNB invited the media to a launch of their new financial education programme, Fincents, designed to educate people about complex financial concepts and get them to start taking charge of their money.
Esther Ochse, channel head for FNB Advisory, said it was important for people to keep an eye on how they spent every cent.
“This sounds like too much effort but it can be done, especially as most households are likely to feel the pressure of a limping economy coupled with an increased cost of living.”
Ochse said the first step was for people to pay attention to how they spend and start making changes to achieve real savings.
She said the Fincents programme would talk to customers about financial management.
“Having money in your pocket is not enough, what matters is how you manage that money,” she said.
Money matters aren’t the easiest to deal with and many people end up splurging on things they don’t need.
According to a 2016 Finscope survey, the gap in financial literacy was not just a South African problem – only 33% of adults around the world understand basic financial concepts.
Ochse shared the top five Fincents tips that will help anyone who wants to get their money in order: budget carefully, draft and sign a will, insure the life of the breadwinner, save more for retirement and to provide for children’s education.
“Look at your needs and goals, read and educate yourself, ask questions and get advice from qualified people, don’t borrow money for risky investments and never risk more than you can lose,” said Ochse.
She also said whenever there was extra money to spend, it was wise to rather use it for adding to bond payments or on savings and retirement.
“It’s okay to have a splash-out portion, but always plan properly and be careful to live within your means.”
Media guests were then invited to cook a meal that would fit into their budgets. Ochse said if people could spend less on going out and plan their weekly meals, it would save them a lot.
She also gave advice about how to weigh average finances.
“Your bond or rent should never be more than 30% of your gross salary – and that is still high.
“Don’t buy a car that costs more than your annual salary, and make sure your savings are at least 15% of your gross salary.”
Another important tip to remember was to always have at least three months of funds available.
“There are items on your budget that can be negotiated, like clothing, entertainment, wine, non-essentials, some new electronics and gadgets,” she said.
Ochse said it was vital to work out a budget annually and factor in annual increases.