Financial boxes to tick
while interest rates are on hold
The presently flat interest rates give consumers an opportunity to get into
better financial shape by structuring personal finances ahead of the festive
season and the New Year.
Ester Ochse, Channel Head
at FNB Financial Advisory says how people manage finances over this period
could impact their financial wellbeing over the next few months, going into the
New Year.
“Some people might use
this period to tighten financial control, others will pursue investment
opportunities but you also have people who will feel that it’s the best time
for them to spend,” she says.
“The reality is that there
is no wrong or right decision because everyone is influenced by their financial
position. Regardless of what anyone does, there are important financial boxes
to tick to ensure a better financial future.”
Save for education
Whether you have kids in
pre-primary, primary or high school – your education costs are likely to go up
over the next 12 months. By how much is the main question, but it is safe to
factor some kind of increase in your financial plans.
“Parents could easily get
overwhelmed if there are no proper plans to keep up or stay ahead of education
costs. Hence the need to plan in advance, starting with upfront costs like
registration, stationery, uniform and other essential items,” says Ochse.
Plan your festive season
expenses
“Festive season expenses
can get out of hand if not kept in check - where possible, start buying some of
your family gifts now and stock up at a pace suitable to you. This will help
you avoid the impulsive spending habits that are associated with the festive
period.
“If plan A doesn’t suit
you, work out roughly how much you’ll need over the festive period and separate
that budget from the rest of your money - this requires a lot of discipline,”
she adds.
Boost your cash reserves
now
Every New Year brings its
own challenges and opportunities. From a financial point of view, it’s much
easier to capitalise on opportunities if you have cash reserves, such as an
investment account or a savings account. Cash reserves will be very handy
should you need to cover emergencies or unforeseen expenses.
Ochse concludes by saying,
“Even though interest rates have been flat over the last few months, consumers
are not yet out of the woods because the overall state of the South African
economy remains fairly delicate. The cost of living is still relatively high,
with more food prices predicted for the remainder of the year.
“This is why it is
critical to keep a tight budget in order to be prepared for whatever
eventuality. While no single individual can control economic activity, how one
reacts to such activity is 100% within their control.”
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