Are you ready to make fierce money moves? Whether you’re saving for your dream vacay, looking to pay off your debt, starting a business or furthering your studies, you need a smart strategy for financial planning.
COSMO and Good Housekeeping teamed up with Old Mutual to bring you Fierce Money Management. This exciting event for curious and savvy women took place on Saturday, 28 September at Workshop17 in Cape Town. It was all about finding strategies for success to help secure the future you’ve always wanted and equip you with skills to make fierce money moves.
The MC was the gorgeous Sechaba G, and the experts included keynote guest speaker Jo-Ann Strauss, Old Mutual Unit Trusts Managing Director Elize Botha, COSMO editor Holly Meadows, Good Housekeeping deputy and lifestyle editor Vicki Sleet and two financial experts from Old Mutual.
Guests enjoyed delicious food, speed networking, makeup touch-ups by Elizabeth Arden, an amazing goodie bag and a chance to win spot prizes, including R5 000 cash. The guests left feeling empowered and ready to tackle their fierce money moves.
10 Ways You Can Be Fierce About Your Money
1. Dodge The Cinderella Complex
Old Mutual Unit Trusts managing director Elize Botha brought up this vital topic to emphasise the importance of financial independence.
First described by author Colette Dowling, the Cinderella Complex details a woman’s fear of independence, and an unconscious desire to be taken care of by others. In a society where we’ve been conditioned to expect Prince Charming to carry us off into the sunset, this complex is understandable, but we can and should be our own Prince Charming and make those fierce money moves.
According to Botha, 60% of South African moms say they are single mothers, and only 20% get a regular income from their former partners. ‘We need to take charge, change our lives and plan for what we do not know. You’ll never know what can happen tomorrow, but you can change your reality today,’ says Botha.
2. Don’t Spend Money You Don’t Have on Things You Don’t Need to Impress People You Don’t Know
Jo-Ann Strauss hit us with the truth with this advice. Social media can be a great tool for drawing inspiration, but there’s a darker side when it comes to trying to impress others. Don’t put yourself in a tough financial situation just so that your new designer bag can get you to 1 000 likes. You can #LiveYourBestLife and have a budget, too.
3. Create an Emergency Fund
According to the experts, you should have between three and six months’ worth of your salary put aside at any given time for a rainy day. Think of this as your emergency fund in case of accidents, unexpected medical costs or a sudden loss of income – not necessarily for travelling or splurging.
In addition to this safety net, you should consider Medical Gap Cover and Disability Insurance. It might be difficult to think about now, but drafting a will to protect your assets and dependents after you’ve gone is something of utmost importance.
4. Start Saving and Investing Today. Yes, Today!
According to Botha, only six percent of South Africans are currently able to retire comfortably. This is a scary statistic, and the earlier you start saving for your future, the better. A common trap we fall into is thinking that ‘I don’t have enough money to save right now’, but the truth is that every bit helps. Consider asking your great-aunt for cash for your birthday instead of that scented candle, and sell the clothes you no longer wear and save your money.
Investing now will make a bigger difference than you could ever imagine.
According to Barry Matthew, a Certified Financial Planner® and a member of the management team of Old Mutual Unit Trusts, ‘the earlier you start, the bigger the benefits you get from compounding through reinvesting the dividends and interest you earn.
According to Matthew, if you want to rely on R1 million for your retirement years and you start investing at 18 years of age, you only need to invest R155 per month to reach your goal; if you start at 25 you need to invest R308 per month; at age 35 it’s R847 per month; and at 45 it’s a crazy R2 623. You can see where this is going – start early.
5. Investing is Much Easier Than You Think
Get the myth out of your head that you need a ton of money to start investing, or that opening an investment account is a headache. Botha shared that with the 22seven app you can start investing with just R250!
Try to live by the 50, 30, 20 principle, which essentially means you will spend 50% of your income on necessities like rent and food, 30% on your wants and debts, and 20% on saving and investing.
According to Pat Magadla, senior business development manager at Old Mutual Investment Group, investment and banking apps are your new best friend. Different things work for different people, so look around and see which app suits your financial life best. Some options include 22seven, Goodbudget, Mint and Wally.
If you head to www.oldmutualinvest.com you can open an investment account in just four easy steps, and you can choose from the Investment Series, 10 hand-picked funds, with varying degrees of risk and different investment periods. If you’re still a bit unsure of how it works you can partner with an accredited financial adviser, who is trained to help you.
‘In the time it takes to sit and drink one glass of wine, you can open an investment account and secure your future. The only things you need are your smart device and good Wi-Fi,’ says Magadla.
6. Make Your Debt a Priority
Debt can be a scary topic. It’s better to face it head-on to ensure you have control over the situation. Did you know that there’s good and bad debt? Good debt has the potential to increase your net value – for example, a home loan or a loan for buying a business.
Bad debt is usually borrowing to fund your lifestyle or a depreciating asset (something that loses value quickly).
You need to have a strategy for paying it off. According to Matthew, this is the checklist you should follow when it comes to your debt.
- Don’t compartmentalise. If you’ve got debt, try to get rid of it. Think of freeing yourself from debt as an investment too.
- Make your credit payments on time so as not to impact your credit rating.
- Always pay at least the minimum.
- If possible, pay more!
- Pay off the biggest debts first, like credit cards and clothing and furniture accounts.
- Close accounts that you are not using. Credit providers check all credit agreements.
- Don’t ignore your creditors. Be proactive and discuss a repayment plan.
- If you can’t make payments, involve a debt counsellor.
7. Get Yourself an Accountability Partner
You might need someone to tell you that you’re making a bad decision, or that your financial planning needs more attention. ‘Who’s going to hold you accountable to actually implement some of the goals you have?’ asks Matthew. Pick a partner, a friend, family member, or a financial professional to help you stick to goals like saving, debt repayments or setting up a will.
8. Learn to Compromise and Get Creative
Vicki Sleet says there are plenty of ways to save money at home. Try cutting down on buying snacks, painting your house with sample tins or accepting offers from your friends to bring food when they visit you, embrace the small ways you can save.
It’s also important to get creative and learn how to compromise. Instead of spending a ton of money on a new couch (eek!), look into how much the fabric and reupholstering will cost if you just update the one you already have. ‘The moral of the story is that if you’re prepared to compromise, the sacrifice you think you are making is not even there,’ says Sleet.
9. Separate Your Savings Account From Your Transactional Account
This will ensure you’re making fierce money moves and not using your savings for shopping and daily expenses. According to Magadla, opening a separate savings account can also offer you a more attractive interest rate. Setting up an automated stop order will keep the cash coming into your savings account.
An Old Mutual Money Account also gives you an option to select a percentage of your expenditure that will be allocated to your savings. For example, you can set it up so that five percent of everything you spend goes to your Old Mutual Money account.
10. Become a Boss at Budgeting
‘This word is a swear word to many people, but the reality is that budgeting is the cornerstone of your finances. It affords you the opportunity to understand how much money you have and how much money you’re spending,’ says Magadla.
Set up a budget and track your spending with apps like 22seven, and make sure that you revisit it often to ensure that your budget always suits your current situation.
This post is sponsored by Old Mutual.
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