In current times, we cannot simply be living from month to month financially, thinking that we will have enough savings and retirement benefits for the future. You need to consider several things when doing future planning such as:
- Will I have enough saved up for when I retire on day:
- We often forget that once we retire, our fixed monthly salary falls away and if you do not plan, you will not have any monthly income to afford your monthly living costs.
- There will still be monthly running expenses even if you have paid off your debt such as monthly utilities, groceries, etc and you need to make sure that you have adequate retirement benefits and savings.
- How will I ever be able to afford a deposit on a new vehicle or house?:
- When you are planning on purchasing a new house or vehicle, you need to keep in mind that you will have to pay a deposit.
- If you do not have the funds available for a deposit, you can save monthly by making use of future and present value formulas to work out how long and how much you need to save to build up the deposit necessary.
- Tips on paying of your home loan:
- You can save so much interest by paying off your home loan quicker than the initial loan period especially if you have a flexi bond.
- Here are a few examples on how to repay your home loan off quicker:
- Increase your monthly home loan installment by a certain percentage each year. Just think of it this way – if you were renting a house, your yearly rent would increase each year by a certain percentage.
- You could also pay a fixed additional amount each month onto your home loan.
- When the interest rate decreases, do not adjust your home loan installment to the lower amount, keep it at the amount it was originally.
- If you have additional funds or savings, pay this onto your home loan. Especially if you are in an industry where you receive fluctuating income – take a fixed amount each month for yourself as a salary and the rest you pay onto your home loan account.
We spoke about budgeting in one of the earlier stories, and part of budgeting is to account for your savings. It is never too late to start saving.