Starting the year on a clean financial slate and being money-savvy is an ideal resolution to set for 2023. Social media influencers Rego and Dise, along with Ivyn Sambo and lifestyle YouTuber Simphiwe Ntuli – are getting organised early for a successful 2023.
They each asked their financial advisor a money-related question, the one that is top of their mind and keeps them up at night. And since many other South Africans are likely to have similar questions on their minds, here is an excerpt from each of their chats.
Rego & Dise: What’s the best way to navigate increasing interest rates?
Adele Barnard, Sanlam Financial Advisor, said higher interest rates translate to higher debt repayments.
“So, you need to make sure you have a budget and stick to it as much as possible. Budgeting will help you find ways to reduce expenses so you’ve got more money to pay off the debt that might increase because of the interest rate hike,” added Barnard.
“Also, consider avoiding using your maximum credit limit if you’re considering buying property or a new car in 2023. Instead, leave room in your finances to cover future interest rate hikes so you can still comfortably afford your bond or car instalment in case of a hike. Remember to check your credit score regularly to know your current credit standing.”
Simphiwe Ntuli: How can someone with an inconsistent income, like an influencer or a freelancer, ensure they’re financially responsible and maintain their lifestyle during the dry seasons?
Investment Specialist at Sanlam, Carol Maphike, said one of the most important moves to make if you have an inconsistent income is to build up an emergency fund.
“Essentially, this means saving a portion of the money you earn, so that you have a buffer in quieter periods. Aiming for enough to cover three months’ worth of living expenses is a great idea.”
She said this will take care of one’s short-term savings needs. Then you need to think medium- and long-term too, both in terms of investing and guarding against risks.
“For this, working with a financial advisor is key. A planner will help you budget for your needs and reduce unnecessary spending by analysing your spending habits, debts, and expenses based on your type of work and peak periods. But more importantly, they’ll help you plan for consistent money success and financial confidence,” added Maphike.
Ivyn Sambo: What should I consider when creating a financial plan for 2023 in terms of investment and budgeting?
Managing Director at Pearl BlueStar financial advisory services Craig Williams, said: “2023 is going to be a year for conservative money behaviour in my view. We know that the economy in South Africa, and even others around the world, are going through a tough time. One of the first moves to make is to cut back on unnecessary spending so you can free up funds to invest.”
Williams said he recommends starting the year with a full analysis of the budget, and if your goal is to save, analyse those wants and needs and see where you can cut back.
“And then treat those cost-savings like a gift to your future self! So don’t spend them, redirect them to investment vehicles. Financial advisors can help you pick the right one and you can watch your money grow over the long term,” concluded Williams.
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