Are you financially savvy?

With it comes the time to spoil your loved ones – perhaps only those who spoil you – all on a shoestring budget; one that is shorter every year.

You would have had to have been living underneath a rock for the last few years not to have heard and noticed that the economy is taking immense strain.

Some companies have retrenched staff in an effort to cut back on expenses and won’t be able to pay staffers bonuses at the end of the year.

This prospect is terrifying, and it shows little signs of letting up.

I was recently jolted into thinking of my old age, decades before I thought I’d have to; convincing me that we should all think a bit further than our next holiday.

It was a cheerful Friday afternoon before I visited Methodist Homes – Eddy House, to interview five women on their retirement shortcomings. The mood rapidly changed into one of pity.

I was saddened to hear that one of the residents survived on R550 a month, while four of the five women were heavily reliant on their children for survival. They probably won’t be eating any turkey on the 25th.

The experience gave me an insight into how abject some people’s financial situations really are, not forgetting those who are “surviving” on less, or have given up hope of survival altogether.

All five women said that, without doubt, they did not adequately plan for their old age.

All the planning in the world might, however, still not guarantee a comfortable retirement.

The cost of living is sky high and people are today living longer than before, essentially outliving their capital.

We will all need a bit more string at the end of our shoe, but how do we pay the bills and ensure the piggy bank tips the scales?

According to Grace van Zyl, financial life strategist and owner of Aspire Wealth Management, in Northmead, people need to save for retirement as early as possible.

“The earlier you start planning and saving for retirement the higher the probability that you will be able to maintain the lifestyle you are accustomed to in retirement,” said van Zyl.

“For many people, retirement is still a long way away, and they have the approach of ‘I will start planning/saving next month/next year’.

“This is a dangerous approach, as the longer you leave this the more you have to save, or downgrade your lifestyle in retirement.

“Many retirees are dependent on government pensions or their children, as they do not have adequate savings/pensions to pay for their basic needs.

“The sad reality is that many retirees are still looking after their children or grandchildren as they are unemployed.”

So, what should you do?

• Utilise what you have

Buying new, flashy things, is not always a wise financial move. I’ve always been told to hold onto what has been paid for. A frugal lifestyle could be a fruitful one.

• Do I really need it?

In response to this question, a bank’s statement was: “I want to need it”. Ask yourself whether you really need it before you buy it, then decide on whether you can afford the item.

•  Save, no matter how little

This is no easy task. Shiny things are a pleasure to own, but having money in the bank guarantees a good night’s rest.

•  Have a side line

The days of having one income is no longer possible. People need to think outside the box. Have a huge property with nothing being done with it? Why not start a vegetable garden. Feed your family from it and do your bit for charity by donating excess produce to the less fortunate.

•  Consult the experts

Make informed decisions. How often do you think you know everything, only to later pay the price for your ignorance? Seek assistance from a financial adviser, no matter how insignificant you think your saving contribution is.

My festive wish to you: have a splendid time, but don’t break the bank doing it. Spare a thought for those who won’t see Santa or his gifts this Christmas.

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