Bertie Nel, Head of Financial Planning and Advice at Momentum
Amidst dynamic economic shifts, from climbing interest rates to relentless petrol price increases, we must continually find new ways to keep our financial garden flourishing. Now that winter is over and spring is here, it is time to prepare for growth.
As revealed by the Momentum-Unisa Consumer Financial Vulnerability Index (CFVI), rising interest rates, high food and fuel prices and load-shedding ensured consumers remain financially vulnerable in the second quarter of 2023.
According to Bertie Nel, Head of Financial Planning and Advice at Momentum, as costs soar and salaries struggle to keep pace, it’s time to approach personal finance management with innovative strategies.
“Think of it as tending to your financial garden, where careful pruning and nurturing can yield a bountiful harvest,” says Nel.
He recommends these ten tips to keep your financial garden in tip-top shape and ready for the new season:
Tip 1: Plant the seeds of savings today
Just like a gardener plants seeds and carefully care for them so that they can bloom in the new season, starting to save today will see you reaping the benefits of compound interest in the future. Even a small amount put away regularly can grow into a substantial sum over time.
Tip 2: Trim the excess (expenses)
Like pruning overgrown branches, unnecessary expenses must be cut to keep your finances in shape over the longer term. Review your subscriptions, memberships, and impulse purchases to prevent your financial garden from becoming unwieldy.
Tip 3: Cultivate multiple income streams
A diverse financial garden is more resilient; plant multiple income streams to buffer you against economic droughts. Consider freelance work, part-time gigs, or investments to bolster your financial stability.
Tip 4: Weed out high-interest debt
High-interest debt can strangle your financial growth like invasive weeds. Prioritise paying off the most expensive debt (credit cards and loans) that attracts the highest interest rates first to free up resources for more fruitful pursuits.
Tip 5: Embrace a Bonsai approach
Just like bonsai, the Japanese and East Asian art of growing and training miniature trees in containers, focus on financial planning. Consult with your financial adviser to craft your unique financial plan that considers your short and long-term goals for a portfolio that can deliver growth and beauty. Don’t be afraid to start small.
Tip 6: Prune unnecessary subscriptions
Similar to trimming dead leaves, cancel subscriptions and services you don’t use. Redirect those funds towards investments or experiences that will contribute to your financial blossoming.
Tip 7: Fertilise your financial knowledge
A well-informed gardener fertilises the soil to produce healthy plants. Educate yourself about personal finance, investments, and money management to make informed decisions and nurture your financial growth.
Tip 8: Weatherproof your finances
Just as gardeners prepare for changing seasons, build an emergency fund to withstand economic storms. This cushion can protect you from unexpected expenses and job instability.
Tip 9: Plant seeds of investment early
Planting financial seeds in the form of investments early can yield a robust future harvest. Explore options like stocks, bonds, and real estate to cultivate long-term prosperity.
Tip 10: Reap what you’ve sown
As your financial garden flourishes, take time to enjoy the fruits of your labour. Whether it’s a dream vacation or helping to secure a better future for your family, make sure you enjoy the rewards of your diligent financial gardening with relish.
Nel says in a world where economic trends can be as unpredictable as weather patterns, it’s crucial to adopt a proactive approach to your financial wellbeing.
“While everything around you may be going up, the right advice can ensure your financial stability doesn’t lag behind. Integrating these life hacks into your finances but also consulting with your financial adviser will help you to successfully weather the economic storms and enjoy the lush blooms of prosperity when summer arrives,” Nel concludes.
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