Get your retirement savings into place. Each year that you delay putting money away has a long term knock on effect due to the power of compounding. As an example, for every R4000 of retirement income that you want, you need R1 million in retirement savings.
For every year that you save into a company pension or provident fund, you will normally secure 2% of your retirement income. Save for retirement from age 25 to age 65 and you'll have 80% of your retirement secured. Start at 35 and you'll only have 60% of your retirement income secured.
Everyone can afford an extra R500 per month!
Get rid of short term debt!! Overdraft facilities can attract interest rates as high as 23%. Credit card debt is normally around 18%. Make a concerted effort to pay more than the minimum each month and get rid of that debt.
Credit cards should only be used if you can pay the amount in full each month. This helps to create a good credit record. Otherwise credit card availability should be saved for emergency purchases until your emergency fund is in place.... see below.
Get an emergency fund in place. No one knows when unexpected medical expenses may arrive. Similarly when do you plan on unexpected car emergencies, household emergencies, retrenchment etc. It's a good idea to eventually get 3 - 6 months immediate expenses put away for these emergencies.
Yes, this sounds like a large amount of money and may take a few years to get there, but it's better to have this money stashed away earning interest as opposed to using your credit card and pay 18% interest.
The added benefit of this savings, is that if it's not used, it grows over time and can supplement your retirement savings in later life.
Perhaps consider saving until you have 2 months emergency money stashed away and then let compounded interest grow it until it's at 6 months savings and beyond. If you use this money for an emergency, then re-invest into this fund until you have replaced the money you have used.
A tax free savings account can be a great way to stash the cash for your emergency fund. Any withdrawals at retirement, or before, are tax free!!
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