It's time to review your finances

By Staff Writer

From Personal Finance

February 23, 2008

By Laura du Preez

Short-term factors - such as the volatility in the markets that was
manifest again this week - should not stop you from holding to the
course towards your goals.

But what the minister did not say this week is that, like any good
skipper, you need to take note of the changing conditions at sea and
plot your course carefully.

The Budget Manuel presented and the proposed changes to tax legislation
that accompanied the Budget will necessitate a review of many aspects
of your finances and financial planning over the coming year. You will
need to review:


Your personal budget. Your March pay cheque will reflect the changes
Manuel announced to the personal income tax tables.

Your tax deduction should be lower, a result of the new rates, and
possibly because of the increase in the amount you are allowed as a tax
deduction or to receive tax-free from an employer for medical scheme
contributions.

But don't make spending plans for the additional cash you may have next
month. Manuel also announced some measures that will impact negatively
on your personal budget, most notably the levy on electricity and the
increases in the fuel levies. 


Although it will be difficult to quantify these increases immediately,
you should have room in your budget to accommodate these changes.


Your savings plans, because the interest income you can receive tax-free
each year has been increased.

Your retirement plans. A major review of your retirement plans is likely
to be necessary later this year when details of the government's plans to,
among other things, change the maximum amounts you can contribute to a
retirement fund and enjoy as a tax deduction are announced.

In addition, you may want to make small adjustments to the projections you
or your financial adviser have made on how your retirement savings will
perform in light of this week's announcement that retirement funds will not
pay dividend tax.


Your estate plan. There will be a review later this year of estate duty paid
by the estate of a person whose life is assured as a result of life policy
payouts. The South African Revenue Service plans to exempt life assurance
payouts up to a certain amount and also to give uniform relief from tax on
pension fund death benefits so that the unwary enjoy the same benefits as do wealthier people, who use sophisticated strategies to reduce their tax liability.


Your small business taxes. If your small business has an annual turnover of
less than R1 million, you will probably want to take advantage of the turnover
-based tax system that was announced this week and the removal of the need to register for value-added tax.
 

Recent Articles

Featured Debt consolidation – Explained

Dealing with debt can be daunting. If you’re struggling to keep track of which store account to pay next and weighing up which credit card is more important to settle first, you may have considered debt consolation. At Justmoney, we’ve decided to get down to the basics and explain what this entails and what impact you can anticipate on your credit score.  

Read more

3 Vehicle financing options compared – which is cheaper?

Buying a car is a considered a milestone, both in life and financially. Unless you’re able to fork out the cash, many opt for financing. But often the excitement to drive it off the showroom floor overshadows the need to check if you’re choosing the most-suited option. To help you make the best-informed decision we compare available vehicle financing structures in South Africa.

Read more

Splitwise: Split the bill not the friendship

Collecting your friends’ debt to you can be draining. You don’t want to ruin your friendship with them, and it can also be extremely awkward. I don’t know how many times I have written, deleted, and rephrased texts, reminding people to pay what is due to me.

Read more

Stokvel-friendly accounts – which one is fair?

The stokvel economy is approximately worth R49 billion in South Africa. This is according to the National Stokvel Association of South Africa (Nasasa). Altogether 24% of these stokvels are in Gauteng, while only 6% are in the Western Cape.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Cape Town Fish Market Swartland Special

Price: From R123
When: Until 14 July
Where: Cape Town

Aha Casa do Sol Pay 2 Stay 3 Special

Price: R1,200
When: Until 31 July
Where: Mpumalanga

Open University Free Courses

Price: Free
When: Daily
Where: Online