Managing your finances can be a juggling act that is often confusing and overwhelming. Knowing you have life’s expenses under control is a great way to avoid future stress or unnecessary worry. With so much advice on how to increase or invest your income (and so many ways to spend it!), it’s normal to feel overwhelmed sometimes.
But don’t worry, we’re here to offer you tips on planning, saving, investing, and managing your finances and will put you on the path to financial success.
Step 1: Acknowledge the importance of your own goals
Ask yourself what do you dream of one day? A business of your own, perhaps, further education, a new car, perhaps a trip around the world. Write your top priorities down and stick them up inside your wardrobe door or on your fridge. A constant reminder will make the dream seem more real and keep you motivated.
Step 2: Manage household expenses so your ability to save is not compromised.
If money is tight in a specific month, look at ways to trim household expenses.
• Compare prices on websites before you buy.
• Buy according to plan – make a list and buy only what is on it.
• Take advantage of sales and special offers.
• Make the most of your petrol – keep your car serviced and your tyres correctly pumped.
• Go through your home and look for ways to save energy and costs.
Step 3: Pay yourself first.
It’s very important to establish the habit of saving by starting a monthly investment. Treat your savings like a bill, preferably paid by debit order. Put the money into an investment fund towards your big goal.
Step 4: Decide where to invest.
Investing in unit trusts is a popular choice. They give you access to a diversified portfolio (without the stress of managing it yourself) and, if you need to, you can access your funds within one day. Most importantly, they have the potential to offer excellent returns over the medium to long term. But there are literally thousands of local and international unit trusts available to South Africans, so how do you decide what’s right for you? The trick is to keep it simple! Old Mutual Unit Trusts’ Classic 5 Investment Collection makes unit trusts even more convenient with a range of five handpicked funds, chosen out of a range of 40 unit trusts, which we believe are the perfect investment vehicles for most types of investors.With the Classic 5 Investment Collection, you can choose a fund to meet your specific needs – depending on whether you want a lower risk fund or a higher risk fund, which looks for maximum growth.
Then you can use this fund (or funds if you choose more than one) as the basis of your portfolio.
You can switch between them as your needs change, or you can add other funds from our full fund offering. Bottom line, you call the shots. For more information about which investments to choose, call us on 0860 WEALTH (932584) or contact your Old Mutual Financial Adviser or Broker.
You can also use our “InvestRight Tool” online at www.investmentcollection.co.za to help establish how much you will need to save and invest to meet your financial goals, be they short-, medium- or long term.