Some researchers trace the origin of spring-cleaning to the Persian New Year which falls on the first day of Spring. Now known as the Iranian Nowruz, the practice of Khāneh Tekānī – or spring cleaning – can literally be translated as ‘shaking the house’. Wherever the roots of spring-cleaning lie, it starts with opening the doors and cleaning out the rubbish. Here’s how to shake up your finances this Spring:
Start planning your festive season budget
It may sound ridiculous, but Christmas always arrives quicker than we anticipate. Most retailers start stocking Christmas and festive season items from early October and many year-end office parties take place in November. It is therefore advisable to use the month of September to set out a detailed festive season budget to ensure that you don’t overspend, especially as the hype around the silly season gathers momentum.
Decide now what to do with your bonus
For many people, receiving a year-end bonus is not guaranteed – especially in a sluggish economy. If you are counting on a bonus, starting planning now on how best to use the extra money. You may want to consider using it to top up your retirement annuity before end-February 2020, put it into your access bond, keep it as a source of emergency funding or pay off high-interest debt.
Get new short-term insurance quotes
It’s always a good idea to shop around to ensure that you are getting the best deal, especially when it comes to short-term insurance. With so many products and product structures on offer, it is often difficult to obtain like-for-like comparisons. If you don’t already have one, find an independent and reputable short-term insurance broker who can prepare some comparative quotes for you. Saving money on your short-term insurance premiums will allow you to boost your investments, so it is definitely worth the effort. As a word of warning, there are lots of insurance companies that offer cheap premiums, cash-back rewards and premium discounts, amongst other attractive offers. Cheaper does not always mean better, and it is important to choose a company that has a reputable claims-paying record.
Make sense of your rewards and loyalty programmes
Keeping track of benefits, points and discounts offered by the many rewards and loyalty programmes can be time-consuming and frustrating. Set aside some time to ensure that you are maximising the benefits on offer to you. Having said that, avoid falling into the ‘spend-to-save’ trap where customers are only rewarded after spending at a certain level. This can result in you buying things you don’t need just to access extra points or rewards.
Check all subscriptions and make tough decisions
Fibre, web, DSTV, Netflix, Apple music, Deezer, Showmax and Photoshop are just a few examples of subscriptions that can drain our monthly budget. Now is a good time to do an audit of exactly which services you are subscribed to, how much you are paying and whether you are receiving value. The process may require you to ask some tough questions and make some difficult decisions but could end up saving you lots of money.
Unpack the truth about your convenience spend
Our convenience spend is not limited to Uber rides, tipping and coffee-on-the-go. Every convenience service comes at a price and now is a good time to undertake a cost-versus-benefit analysis. While online shopping may be convenient, most retailers charge a delivery fee which can add up if you are doing weekly online shopping. Dog-walking, pet grooming, house cleaning and garden services are all convenience expenses that we use on an outsourced basis to make our lives more convenient. If you’re looking for extra room in your budget to save, this exercise may prove to be worthwhile.
Check your cell phone contract and data usage
Many of us have had our cell phone contracts for a number of years and don’t pay much attention to the small print when upgrading. However, it’s worth taking the time to check your cell phone usage and popping into your nearest service provider for advice on the best package for you. Most service providers can tailor-make packages based your airtime, sms and data needs and you may find that you can save some money by moving to a more appropriate package.
Scan and shred old documents
While it’s important to have a good filing system, having it clogged up with documentation that you are no longer required to keep can cause inefficiency. Scan and file those tax and financial documents that you are legally required to keep. The rest of the documents you can simply scan (if necessary) and shred.
Do your e-filing
The deadline for e-filing is 4 December which leaves ample time to get your tax returns submitted. Commit now to getting all your documentation together so that you can file your returns timeously and receive any refunds owing to you as soon as possible.
Clean up your passwords and PIN numbers
Bank fraud and scams are at an all-time high. To better protect your bank accounts, take some time to strengthen your passwords and PIN numbers. At the same time, ensure that your passwords are safely stored. Many people attest to keeping their passwords in single document on their desktop or smart phone, which is not ideal. Consider downloading a reputable password manager app to tighten your password security and reduce the chances of being hacked.
Create a digital will
Bank accounts, online subscriptions, social media accounts and even medical aid sites host a huge amount of our personal information, all of which can only be accessed through unique passwords, email addresses and PIN numbers. A digital will is a document which lists all your online accounts and subscriptions together with details necessary to access these sites in the event of your death. Your digital will can also nominate a person responsible for closing down your social media sites and de-activating your subscriptions. Although not a legal document, it is a very useful document for your loved ones in the event of tragedy.
See the whole picture
Find an app that will allow you to see your whole financial picture at once. Apps such as 22Seven, Moneysmart and My Money are easy to use and allow you to see everything all in one place. They help track your income and expenditure, list your assets and liabilities, draft a budget, track your money goals and plan your investments.
Check your beneficiary nominations
As our personal circumstances change, so do our financial objectives. Ask your financial adviser to print off a list of your policies and investments together with your nominated beneficiaries. Take time to check that the people who stand to inherit are the people you intend to receive benefit from your estate.
Draft a living will
A living will is a document that sets out your health care wishes at the end of your life. In your living will, you can request that any treatment that would otherwise lengthen your life should be withheld, in specific circumstances including being in a permanent vegetative state, irreversibly unconscious or terminally ill. You can also specify your desire to donate organs or tissue in your living will. Speak to your adviser about having a living will drafted and ensure that your loved ones know of its existence.
Check your bond cover
When taking out a home loan, your financial institution may have insisted you have life cover to the value of your bond. While the value of your home loan may have decreased over time, you may not have adjusted the level of your bond cover accordingly and could be paying for cover you no longer need. Take time to check your bond cover against the amount outstanding on your home loan and adjust appropriately.
Clean out your wallet
Having a well-organised wallet will make you feel more in control of your finances. Remove and file your receipts, cut up old cards, remove unnecessary items and organise your cards based on the need for accessibility. Throw out old business cards that you may have collected over time, empty out your coin collection and don’t carry too much cash.
Check your bank charges and shop around
With a number of new, innovative banks in the marketplace, now is a good time to assess your bank charges and shop around for better deals. Do an audit of your bank charges over the last three months, and then do some research into what other banks are offering.
Check your default option on your group retirement fund
If you are contributing to your employer’s retirement fund, it is advisable to check which investment strategy you are contributing to. In general, employee contributions are allocated to a ‘default option’ unless otherwise specified by the employee. You may find that you are too conservatively invested for your investment horizon and may want to opt for a more aggressive strategy.
Plan your Black Friday spend
Black Friday, which is scheduled to take place on 29 November this year, is effectively a ‘sale day’ when retailers and big brands offer massive discounts on products ranging from food to household appliances and holidays. Taking place less than a month before Christmas, many people use the occasion for Christmas shopping and very often use their bonuses to fund their purchases. In the hype of Black Friday many consumers attest to spending their hard-earned money on items they didn’t know they needed. If you do plan to shop on Black Friday, make a list of everything you need to buy and stick to it.
Register as an organ donor
The best way to signal your desire to be an organ donor is to formally register with the Organ Donor Foundation at https://www.odf.org.za/. Registration is relatively simple and after registration you will be sent an organ donation card which can be stored in your wallet.
Have a great Thursday!
Categories: Financial Planning