Improve your finances for 2013

Justmoney spoke to Gavin Came, chairman of the financial planning committee at the Financial Intermediaries Association of Southern Africa (FIA) and consultant at Sasfin Bank, to find out what you should be doing to improve your financial outlook for 2013. This is his advice:


1.    Learn to live within your means. “The author Charles Dickens once said: ‘Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery,’” points out Came. “My advice is that consumers should learn to live off about 85% of their salaries. Everything must come off, including food, expenses, bonds etc and that will make a huge difference this year.”


2.    Review what you have. “If you have built up some savings then tidy it up,” says Came. “Do you have a non-performing unit trust? If so why not add it to your other investments to lower your investment costs?”


3.    Review how much you are putting into your retirement annuity. “It’s the most cost effective and tax efficient investment you can make,” says Came.


4.    Evaluate whether your financial decisions still fit in with your family’s needs and profile. “Find out if your life insurance covers your family’s costs when it comes to food, clothing and other expenses. Also find out if you have the correct medical aid for your circumstances,” advises Came.


5.    Save now. “It’s never too late to start saving. Don’t wait for others or the government to start implementing things to make your life easier,” advises Came. “And if you are starting out on a job for the first time put between 18-25% of your salary into savings now so that later you won’t be hit by things like baby expenses and the need to come up with the money for a deposit for a home.”