Counting down the days to a debt-free retirement? Or working your socks off to pay the bills? Achieving financial fitness will take a little bit of effort on your part. How well off will you be in 10 years? Take our quiz to find out.
Too many of us stick our heads in the sand when it comes to our future finances. But unless you want to work until you’re 70 years old (and that’s if you haven’t yet suffocated under a pile of unpaid bills first), now’s the time to change how you think about money. Taking our quiz is a good place to start…
Want some advice? Here are our answers to the quiz you just took:
What we say about asking for a raise: If you don’t ask, you may never receive. So, if you want to earn more in your current role, it’s down to you being more vocal. Ask for more money – and don’t forget to highlight your achievements at the same time.
What we say about paying with cash or credit: Everyone loves something for nothing, but the reason some credit cards give rewards is to encourage you to spend more. However, they’re usually the ones with the highest interest rates. If you don’t clear the balance almost immediately, the interest you pay dwarfs the very best rewards. Cash is always the best way to pay – in fact, it’s estimated people who pay cash spend 20% less than those who whip out the plastic. And if you’re absolutely addicted to freebies, try loyalty cards, such as the Clicks Club Card, Woolworths Rewards, the Edgars Thank U card or Pick n Pay’s Smart Shopper card instead.
What we say about fall-back funds: If there’s one thing we should have learned from the last economic slow down, it’s that everything can – and will – change. Often overnight. Experts say we should all have an emergency fund that will cover at least six months of expenses, in case you lose your job. Yet, according to 1Life, around 14 million South Africans have impaired credit status records and nine million are currently in serious financial trouble.
What we say about budgets: Budgeting isn’t about cutting out all the fun. It’s just a great way to make sure you know what you have coming in and where it goes, so you don’t get into debt. And, with online banking, it’s never been easier. According to the National Credit Regulator, 6 200 South Africans apply for debt counselling a month and one in two credit-active South Africans have had an account in arrears for at least three months. So check your balance regularly.
What we say about debt: It’s impossible to say how much debt is too much, but if you’re at the stage where you avoid opening financial statements, the chances are you know you’re already in trouble. You need to face up to the problem right now and put in place a strategy where you can begin to pay it off month-by-month.
What we say about pensions: According to recent stats, 15% of South Africans don’t plan on ever retiring, while another 15% plan to retire but don’t save for it. Around 41% believe they’ll have to work after the age of 65. And with life expectancy increasing, people entering the workplace now could reasonably expect to be retired for almost as many years as they worked, assuming they retire at age 60. Even if you havet a workplace pension, you should check it will offer you the retirement income you expect. For a personalised estimate, try the pension calculator on oldmutual.co.za, under the Tools tab.
What we say about planning for the future: It doesn’t matter who handles most of the finances, you need to understand each other’s goals. Even the most communicative couple will get some surprises if they sit down and talk about the future. Don’t wait until a big event – like retirement – to discuss your ideal future.