Financial literacy is needed.
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It is important to prepare for the major financial decisions in your life since most life events will have a direct impact on your finances.

Whether you are getting married, buying your first house or starting a new job, you will be worried about how this will affect your finances.

Below are some hard choices you have to make about your life to succeed financially:

What career you follow

We all want wealth, but how do we achieve it? It starts with a successful career that relies on your skills and talents.

Your career is the engine of your wealth. The more you earn, the easier things should be financially. You have a very important financial asset that many people tend to overlook: you.

For most of your life, you focus on converting your talent and skills into money. You will most likely increase your human capital through studying further or getting a promotion. This will show itself in the form of an increase in your income.

Whether you marry the right person

People who say they are experiencing stress in their relationship mention finances as the number one reason.

Fully disclosing your financial situation to your partner before getting married is necessary, regardless of how uncomfortable it may be.

This is the time to mention outstanding debts, loans, income sources, investments or other financial assets or obligations.

The cost of your house relative to your income

One way to waste a handsome salary: buy a house you cannot afford. If there is one number that drives your financial life, it is your fixed living expenses.

We are talking here about regularly recurring expenses that are unavoidable when you own a house, such as bond repayments, water and electricity costs, renovations and home insurance.

The lower your fixed living costs, the easier it is to save.

Whether you have children or not

Raising a child is not cheap or easy. You must have a solid financial plan in place to ensure that you can give your child the best life.

You can compare raising a child to a second bond on your house. This is because raising a child is a long-term commitment that could last for years until they become financially independent.

What car you drive

Buying a car is one of the largest financial decisions one can make.

When it comes to buying yourself the dream car, the best advice is to buy the car that fits your finances.

How much do you save?

How much you spend determines your savings rate. If you are young, time is one of your greatest friends in wealth accumulation.

You will never get more in the future. Simple calculations show that a 23-year old who invests R6000 every year for 10 years at an annual return of 8%, will have R93873. If after those 10 years she stops contributing and does nothing until age 60, her investment will have grown to R749863; and

Whether you do it yourself or appoint a financial adviser

You definitely do not need a financial adviser, if you have self-control, financial planning knowledge and self-knowledge.

But given that our lives are so full of other activities, you are likely to need assistance with financial planning from those who are qualified to provide it.

Financial advisers are in the business of investor behaviour modification.

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