You’ve worked hard and with the festive season around the corner, it’s almost time to enjoy the results of your hard work, especially if you’re expecting that 13th cheque. Before you go wild with that bonus it’s important to consider your financial status so you can avoid starting 2015 broke.
Apart from it being a good idea to put aside some of your bonus for emergencies like car or home repairs, or paying for school fees and buying uniforms, there are many other important reasons you might want to think about spending every cent of your extra cash.
Follow these three easy rules from Aneesa Razack, Head of Strategic Growth at FNB Investment Products, to survive the festive season financially unscathed.
Save now
Decide upfront how much of your bonus you want to save. Set the money aside in a savings account before the festive season starts. If it’s out of sight, it’s out of mind, and you won’t be tempted to splurge.
In fact, this is a great tip to apply all year round. Pay yourself first by setting up a direct debit into a savings account at the start of the month.
Say you decide to start your savings habit by giving up your morning coffee on the way to work – you could save up to R400 a month. Transfer that money at the beginning of the month before you have a chance to spend it.
Choose the right savings account
Generally you have various options to choose from, such as the amount saved, length of time you save for, and amount of notice you need to give to access your money. These factors can influence the amount of interest you earn and the penalties you will pay if you need access sooner than anticipated.
Think about why you are saving, what your personal banking habits are and choose accordingly. For instance, if you know you’ll need some money soon, you can still set it aside in a short-term savings account, earning interest, so that you don’t spend it. Or, if you are sure you won’t need the money for some months or even years, forfeit immediate access to it in return for a higher interest rate.
Get rewarded
Make sure your bank’s rewards programme thanks you, for opening a savings or investment account. The benefit of your bank rewarding you, allows you to make your bonus go even further.
“By sharing the savings love, you’ll be doing your bit to encourage a savings culture, and ensure that your friends and family avoid the anxiety and panic of being caught short of cash in the New Year,” says Razack. So encourage your friends and family to do the same by giving the gift of actually saving this festive season.
