This topic has become top of mind in the last few years. It is evident that most people are not putting enough away for retirement.
Living on less
Many financial planners will tell you that, in retirement, you’ll want roughly 80% of your pre-retirement income. But surveys indicate that today’s retirees are bringing in far less than that — about 66% of their pre-retirement income on average. Here’s where that money is coming from.
The bottom line is that all of us likely have a greater capacity to adapt and make retirement more enjoyable than we assume during our working years. That doesn’t mean we shouldn’t focus on saving for retirement, which obviously remains vital.
Instead, for those who are decades away from retirement, it is a better way of looking at this and ask how to apply it to your daily life right now. What types of wasteful spending could you eliminate from your life? What is your level of “enough”? If you were to eliminate all of your expenses and then only add back things that add value, what would you be left with?
The answers to these questions are equal parts philosophical and practical. The main goal is to help you live a more mindful life. But the key, as far as this article is concerned, is that answering these questions can help you save far more for retirement (and require less once you enter it).
Either way, this will help you avoid the anxieties brought on by retirement calculators and focus on living a more sustainable life both now and in retirement.
When students graduate from university and embark on their careers and join the working world, there are a few things they need to take into account. Here are some pointers for students to take note and remember once you start their careers and begin to earn money.
Figure out how much you will need up front to move and start your life.
Know what your take-home pay is–it’s not as much as you think.
Be realistic about your expenses and essentials.
Understand cash flow.
Keep an emergency account.
Know when to use a debit card or credit card.
Get renter’s insurance.
Begin contributing immediately to a 401(k) plan or an IRA account.
In the last century, Warren Buffet is undoubtedly one of the most successful investors. His guidance and methods are so simple. Here are some invaluable tips for you to use.
Take Credit carefully – Be wise, and you can succeed without getting into debt. Clever debt aids in investing in your future. You are left in a stronger place long term.Buying furniture for example has a negative long term effect and is not an investment, buying a house on the other hand is an investment and taking a bond is a positive thing.
Always pay yourself before anyone else – It is so important to budget. Spend what is left after saving, and not the other way round. Know what you want to save monthly and make this a priority. This will aid you going forward in acquiring good assets.
Know your good and bad habits – A lot of our money habits have been inherited and take a conscious choice to break the bad ones and replace them with good ones, that only serve you in the short, medium and long term.
Understand the difference between price and values – Always look at the yield of both these words. In Mr Buffets words: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” Do not be scared of Investing
Here are some words and terms you need to know
Open a brokerage account
Pick an index fund
Buy the fund through your brokerage account
Mr Buffet always suggests that if you invest in anything, it must be there for the long term. Have a proper strategy, get someone to help you. Always look at the big picture.
Money does NOT make the world go around. The real focus in life is Family, Health and Friends, the rest is a means to the end. Sure money creates options in life. But remember the things that really count. Remember that materialism does not make one happy. However be wise in your choices with your money.
KwaZulu-Natal Finance MEC Ina Cronje tells students at the Durban University of Technology to take action and be more responsible and manage their personal finances and spending habits to prevent qualifying and entering the labour market with massive debt on their shoulders.
Cronje, talking at a workshop on financial education for government bursary holders and students, enlightened students of the fact that national student loan debts have exploded in the last 3 years. She advised students to take more control of their spending habits and monthly budgets and realize that it was in their hands to minimize their financial debts while they are still young.
Recently their have been media reports with regards to the number of students who own credit cards raising questions and concerns pertaining to students creating debt for themselves, and in some cases even being black-listed, prior to completing their degrees and earning a salary.
Cronje told students that the pressures stemming from financial stress is capable of having significant consequences and in some cases have an affect on their odds of succeeding at university. She reminded students that while they held any debt they would never be free and will continually be at the mercy of debt collector or agencies. Most importantly of all, debts translates into poor credit records that can take a considerably long time to rectify. “Relying on friends, family and government to stay alive does not mean freedom. The road to financial freedom is to get rid of debt and start saving and investing to build your own wealth” she said.
According to recently available research studies carried out by Student Village and Unisa’s department of marketing and retail management, has revealed that national student debts more than doubled over the past few years. Furthermore, student owning credit cards has jumped from 9.5% in 2010 to 20% in 2012. Somewhere around a quarter of all students nationally are presently in debts and the vast majority of spending is on clothes.
While encouraging students to act more responsibly and manage their personal finances significantly better, Cronje at the same time questioned the ethics of retail stores and banks for granting credit cards to students who are not working or earning an income. In many cases, a students only income is an allowance from their parents or bursaries from government and private companies”. She called on all retails stores and banks to act responsibly and do their due diligence and check the financial backgrounds of all clients prior to granting any credit.
Cronje also gave a bit of career advise highlighting the fact that employers, financial institutions and government will not employ an individual for a position that requires trust and honestly when dealing with cash or finances if they don’t have a clean credit record. The primary reason being to avoid the possibility of theft and also to protect their clients.
“When one is in financial trouble, it becomes very tempting to put your fingers in the till,” Cronjé said.