Finance 2

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How to Achieve “True Wealth”, Adapted from article in FNB’s magazine “Elements” Most of us would like to take control of our money-matters but lack the know-how and are perhaps uncertain about where to begin. That’s why FNB have partnered with financial guru Suze Orman to bring you hints and tips on creating true wealth – an effort to define ourselves by who and what we are, rather than by what we do or do not have. Credit cards are an essential tool in today’s wallet. They are the most efficient transaction mechanism you could have – safe, accepted and international. But, as Orman points out, that doesn’t mean they need to be used as a means to accumulate debt. All of the transaction benefits of a credit card are yours if you keep a positive balance on your card. As highlighted in her latest guidebook designed especially for our South African market, the best way to start getting in touch with your money is to determine how much you spend and what you spend it on. To start on your journey towards achieving true wealth, do this simple exercise that serves to put things into perspective. Begin today by putting a few hours aside for this task. Collect all your bank and credit card statements, invoices, bills and the like. If you do not keep these items, this is your incentive to start. Calculate your spending over a 12-month period and then break it down by month. Group all related expenditure together and work out a monthly average by category. This will reveal your actual spending. This is a way to start being honest about your income and expenditure and prevents the self-deception that leads to financial chaos. It will also help you get an idea of your credit card habits – whether you carry over debts month-to-month whilst holding positive balances in other accounts that may be earning less interest. You may find that you could manage your finances to avoid excessive debt completely. Completion of this task demonstrates your commitment to financial freedom. Turn your money dreams into reality by taking this crucial step. Flight into financial security, says Orman, requires grace and self-effort. The degree to which you apply yourself is up to you, but the point is that only you can create it. Moving beyond one’s fears about money, changing one’s behaviour and acting honestly and immediately guarantees unexpected success. Orman combines motivation, life-skills and personal finance education into a package that people everywhere can relate to. Perhaps it is this “people first, money second” approach that has added to her popularity and made people consider their financial standing from a different perspective. Orman...

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Finance 1

Posted in Professional Practice Management | 0 comments

Living within your means is more than paying your monthly bills by FNB from O Magazine. If you earn a salary every month, pay all your monthly bills, have some insurance and a few rand saved – and enjoy the occasional treat, you may feel that you are living within your income and have no need to worry. But what about those bills which come in only once or twice a year? Have you made provision for them or do you panic a bit and either raid your piggy bank or default on another payment to meet the debt? After all it’s only for a month and the company won’t notice a one-month’s slip up, will it? Living within your income means more than balancing your monthly income with your monthly expenses. It means having a little over every month – and saving it – to meet those quarterly or annual bills to which you currently are closing your eyes. Open your eyes and take a good look at those ‘forgotten’ expenses. List your monthly expenses on one page; list your annual expenses on another. These could be costs such as car or house insurance, subscriptions to organisations such as the AA or magazines and newspapers, even getting your car serviced could come as a shock if it only happens every four or five months or so. Not to mention the need for new tyres or the sudden expiry of your battery. If your monthly income and your monthly expenditure equal each other where are you going to get the money from to pay these recurring yearly expenses? Do you prefer to buy clothes, groceries, and toiletries on store accounts or on your credit card instead of paying in cold hard cash? It can be a slippery road to debt unless you exercise strict discipline. You might consider the benefit of using a debit card. This means you don’t have the possibility of debt or a large payment to be made at the month end, but you also don’t have to carry cash around in your pocket on the off chance you might want to buy something. Going on an annual holiday is also a yearly habit for many of us. Do you save towards it every month? Or do you rely on a bonus or a double cheque to take care of holiday expenses? And is it always enough or do you come back with a really loaded credit card which has to be paid off over the next few months – including a substantial cost in interest. There’s no quick and easy answer, only a sensible one. Using the list you made add up the yearly expenses,...

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