Here are some core principles of yoga that relate to a disciplined financial plan:

Balance Is central
How is your financial posture looking? Are you on tip-toes or do you have a stable foot on the ground?

Balance is about asking yourself if you are leaning more in one direction than another. It is a comparison. Are you spending more than last year? Are you saving enough now to provide for the future?

Preparation is key
If you don’t properly prepare, you’ll hurt yourself and hamper your ability to progress in the long term.

A good yoga teacher (read financial advisor) will prepare you for what is coming, both in the present and in the future.

Flexibility Is crucial
Most people who practice yoga, or budgeting, regularly see an increase in their flexibility.

Financial flexibility has to do with your ability to change how you spend based on your current circumstances. If you empty your emergency fund because your car breaks down, can you flex for a few months until the fund is replenished?

Mindfulness will help you reach your goals
Mindfulness is the basis of most meditation, and in simplified terms it means to focus one’s awareness on the present moment.

More than anything else, mindfulness is a path to self-mastery. It allows you to not be a slave to your emotions and to, for example, stick to a budget. Too often we will be swayed by impulsive thoughts that cause us to cheat on our diets or splurge on unnecessary purchases. If you are always aware of your goals and the reason that you are pursuing them then you will be able to achieve them much more easily and with much more determination.

Keeping to your financial plan is always a stretch – be balanced, be prepared, be flexible, but most of all – be mindful.

Bending over backwards for debt? Let’s get in touch and balance that out for you!

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Essentially, good money habits boil down to three simplified points. Spend less than you earn and invest the difference. Pay off your credit cards in full each month. Don’t buy things you don’t need.

With increasing fuel and food costs and the rand in a state of flux there may be a temptation to get into debt by making day-to-day purchases on credit, but it’s at times like these when minimising your debt should be your priority.

Sadly, a very small percentage of South Africans are completely debt-free.

Habits form the very first time you make a decision to do something, whether it’s charging to your credit card or deciding to stay in rather than dine out. You need to break bad habits that get in the way of financial stability and establish new, healthy money habits.

Here are five healthy money habits to implement right now to start a better debt-free life:

• Review your debts and make a conscious decision to pay off the most expensive debt first. This is not necessarily the largest amount outstanding but rather the accounts that charge the highest interest rates, such as high interest-bearing credit cards and store cards. Consolidating all your debts with one single loan that pays off all your debts is another possible option to clear your counters.
• Avoid accumulating more debt: pay for your purchases with a debit card or cash, rather than a credit card. Discipline is key.
• If you receive an annual bonus or any other unexpected windfall, contribute part of this towards reducing your home loan or car finance, as this will reduce the amount of interest you pay overall on these longer term loans.
• Set aside a portion of your bonus for investment over the long term, like a tax-deductible retirement annuity or an endowment fund. Also make sure you consider the various tax-free savings options that offer you your full investment return without being taxed on any of the growth you have earned.
• List your unavoidable commitments in 2016: school fees, medical bills, inflation-adjusted insurance premiums, car services – and ensure you set aside enough to handle those expenses without financial anxiety.

It is better to assess and discuss your impending difficulties than to ignore the problem or wait for creditors to call you wanting to know when you are going to pay back their money.

Need an assessment? That’s why I’m here. Let’s get in touch!

Source: businesstech

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It is always a good idea to be saving IF you are in a position to put some money away. Due to the accessibility and convenience, credit card and overdraft facilities, in general, have higher interest and monthly account charges. So how do you know if you are in the position to put money away?

There are many ways to incorporate saving into a manageable and sustainable practice; here is one approach that splits it up into three different saving streams:

The first stream includes a literal piggy bank, which you fill up with loose change that can be used for bread, milk, eggs, etc. Saving up loose change can yield a surprising sum of cash if practiced persistently.

The second stream you need is a short term savings account (or “emergency fund”) which can be used for a new pair of tyres on your car or a medical aid shortfall or a similar unforeseen expense. With this too, there are many different thoughts. Some people say it should be around one-month’s salary whilst others say three, and some even say six months. A rough guide is to anticipate some potential expensive scenarios, think about how much you would be out of pocket, and use that for your guide. This is one of the many areas of your portfolio where I could add wisdom and insight for you.

Last is the stream for a longer term savings plan. For example, a 30- or 60-day account which allows you to save, but the accessibility requires you to stop and think before you spend. (These longer term savings accounts typically earn a bit more interest than others.)

Now, back to the overdraft. It is usually better to pay this off first with a little more than the required amount, which services the debt. Next you should pay your savings accounts. As Warren Buffet says, “Don’t save what is left after spending, but spend what is left after saving.”

If you have accumulated a fair amount of debt on a credit card then you should go to the bank and ask that they adjust the overdraft to enable you to pay it off without access to the facility. Then give the credit card to someone you trust to keep while you pay off the card.

When paying into your savings every month it is amazingly rewarding once you start to see growth. These future savings also allow you to negotiate better deals when paying with cash instead of buying on credit. There is also a tax benefit when you save, although it is limited.

Need to know more about saving or servicing debt? Give me a call and let’s meet up!

Source: fin24

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Lacking financial understanding
Formal education doesn’t prepare people well enough for the financial acumen of the ‘real world’. You should know how a budget works, what interest is and the difference between good and bad debt. People often have to learn the hard way, by making mistakes. Clue yourself up if you are unsure about certain terms.

Easy credit
Shops will often try and lure you into opening accounts with them by offering vouchers and discounts with a new card. If you have a stable job and a clean credit record then the amount of credit you can get will most likely be a shock. It is easy to think that you will just use it once.

Reading the fine print
Many people sign papers for a hire purchase because they want their new TV or fridge as soon as possible without realising how much more they will be paying than if they had bought with cash. Not many people know how much of a difference an interest rate of 20% compared to 30% can be. Be wary of people pressuring you into signing documents in a hurry, there might be some small print they don’t want you to see.

Lending money
This scenario depends entirely on the amount that is needed and how good for it you think your friend is. If they haven’t repaid the money they borrowed from you last year then it isn’t a good idea. Sometimes it’s easier to say no than have a strained relationship and debt between friends.

Creating a budget for yourself is one of the best ways to monitor your expenses. Having a budget in place empowers you by letting you know what you can afford now, so that you can have the financial future that you plan for.

Need some financial advice? I can help you out. Let’s get in touch!

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It is hard for children to understand the concept of value for money when they have not worked to earn the money for themselves. When a younger child goes shopping they are easily drawn to everything that piques their interest, followed by a torrent of tears if they don’t get what they desire.

So, how do you teach a child the value of money?

First, it’s good to know that children grasp financial concepts relatively easily and are never too young to learn something new. A good strategy is to give them the responsibility over their own finances (allowance).

I heard an interesting story recently about a father who went shopping weekly with his kids. Before going into the shop he would give his children R5 each, which they could spend on anything they wanted. After only a couple of weeks they realised that if they saved their R5 they could buy a R10 item the following week. The father wasn’t the ‘bad guy’ when he didn’t buy the kids something they wanted, it was up to them to save if they really wanted it.

Teenagers usually set their sights a bit higher than a R5 chocolate from the cafe, often playing into the the hype of the latest ‘must have’ gadget or fashion item. This can give you the perfect opportunity to teach the cost of loans and borrowing. If you lend them R1 000, you can give them an opportunity to learn about interest. At 10% per annum (the current prime lending rate is 9,25% per annum), the interest over a six month period would be insignificant. However by charging 10% per month, the total interest repayable would be R771,56 which is almost double for the item. This teaches them patience, the value of saving and the risk of debt.

You can also teach them about interest by involving them in setting up a savings account that accrues interest and allow them to experience how their money will grow.

In order for children to understand how to best work with money, they need to experience its limitations as well as its potential to do good. It may seem tough in the beginning, but the lessons learned can prepare them for a successful financial future. As well as teaching them that you can’t always get what you want, it also teaches them to save, budget and not accept loans at exorbitant rates.

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Fight the temptation
The first thing that you need to do to get out of debt is to avoid the temptation of further using your cards. Take them out of your wallet and hide them away from yourself until the debt has been cleared. Paying for purchases with cash will help you consciously separate your needs from your wants.

Prioritizing debt
Next, you need to prioritize your debts. Make a comprehensive list of your debts, outstanding balances, interest rates and so on. Then arrange the list in order of importance. Mortgage and vehicle payments are usually at the top of most lists as these provide you with basic shelter and transport. One popular strategy is to make the minimum payments on your credit cards with the lowest interest rates and maximize your payments on the credit cards with the highest interest rates. A different approach would be to pay off credit cards with small balances first, then cut up and cancel the card when it has been paid off. Most people only require one major credit card.

Cutting costs
Reviewing monthly expenses and looking for opportunities to cut costs is another way to get out of debt fast. Tracking your expenditures for a couple of weeks allows you to calculate your potential savings in the future. You might be surprised at how much you can save making your coffee at home instead of picking up your cuppa joe on the go.

Formalising your strategy
After you have found channels that allow you to cut costs and have prioritized your debts you will be able to form a monthly spending plan. This plan should ensure that you are living within your means, while also providing a set timeframe in which you should achieve debt freedom.

Another course of action would be to get a debt consolidation loan or credit balance transfer. When used correctly these can be effective ways of getting out of debt. Be sure to investigate all terms, conditions and any hidden fees as well as ascertaining the overall interest savings you may realise.

The number one thing to remember when fighting to free yourself of debt is, of course, point number one: resist the urge to further entrench yourself in debt by using your card. Any progress that is made on other fronts will quickly be made invalid by accumulating more debt. If you need help eradicating your debt or any other financial advice, then let’s get in touch!

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All of your debt still needs to be paid in full!

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“This money could be used to save for your children’s education, pay off your home loan quicker, or even treat yourself to something that month,” says Sibiya.

One of the major problems is that people stop paying for policies and long-term investments in order to service their debt, and this impacts their financial future.  If you have already taken out a loan or maxed out your credit cards and store cards to get through the month, there are ways to take back control of your finance sand enjoy a debt free year.

GETTING OUT OF DEBT

“Acknowledging that you are in debt makes it easier to address the problem,” says Sibiya. “Firstly, you need to stop increasing your debt, which allows you to focus on paying off your current commitments.

“Secondly, plan and be responsible for your own finances. Write down every expense for the month, including groceries, clothing, electricity, rent or bond and credit card repayments.”

Once this has been done you will quickly see that there is space to cut down on spending and clear your debt. Do you really need new clothes, or can you wait for a few months?

If you find yourself with major problems this early in the year, make small changes to your budget, spend less on unnecessary items and if need be, approach your bank to find a solution such as negotiating a longer payment term . They are there to help and they will advise on the best way to manage your finances so you don’t have to stop paying towards savings and investments which are essential to your future.

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