Tackle your debt, eliminate money wasters and start paying yourself first.
CASH OWED TO YOU?
Sometimes, things fall through the cracks and we are none the wiser. Take pension fund benefits: With over R40 billion of unclaimed retirement fund benefits and an estimated 4.8 million people being owed this money, you may have a claim. This is money that an employee contributed to a pension or provident fund, and then either died or left the fund and the money was never paid out to them or their beneficiaries. The Financial Services Conduct Authority can help. To check if you are owed money, go to fsca.co.za, scroll to ‘Customers’ and click on ‘Unclaimed Benefits’. If you are, they’ll put you in touch with the administrator for your claim.
TRIM YOUR TAX
Paying tax is never fun, but you can legitimately pay less. Contributions to a retirement annuity (RA) are tax deductible up to generous limits, which reduces your taxable income, so you end up paying less tax. On an income of R20 000/month, a R1 000 contribution to an RA will save around R260 a month in tax. You will be investing R1 000 per month, but it’s actually only costing you R740 – the taxman is paying the rest. When you turn 55, you can take 1⁄3 of the money in cash and the rest will provide you with an income. With the end of the tax year around the corner, do a lump sum injection into your existing RA if you have spare cash, or get started with a new RA to kick-off the new tax year. Use the Retirement Savings calculator on taxtim.com, or download the SA Tax Calculator app.
DO YOURSELF A FAVOUR
It’s almost impossible to buy a car or property without going into debt, and the interest can be a killer. The longer your repayment term, the more money you’re just throwing away in interest. So be smart and pay in a bit extra every month if you can afford it – it will save you thousands of rands in the long run. Take a home loan for example – on a loan of R1m, payable over 20 years at 7.5% interest, paying an extra R500 a month can save a massive R132 930 in interest and shave 29 months off your repayment period. With the Betterbond app it’s easy to work out how much you could save by paying in a little extra each month. You can use the calculator without having to sign in – just tap the calculator icon below the ‘Sign In’ button.
HASSLE-FREE SAVINGS
Finding money to squirrel away for a rainy day can be a challenge, so here’s a clever idea that lets you build up some solid savings with minimal effort. With the Old Mutual Money Account, every time you swipe, a percentage (you choose the percentage upfront, between 1% and 15%) of your spending goes into a savings account. What’s really great is that this goes straight into a money market unit trust account, which earns a higher return rate than average and allows easy access to your money. You can also save a fixed amount each month if you want to. To sign up, go to moneyaccount.co.za.
ALSO SEE: HOW TO TAKE CONTROL OF YOUR FINANCES
