Personal Finance is one of those terms you hear people talking about in the hip circles. Those really smart kids who seem to have it all together. Personal Finance sounds like one of those terms you’d throw around at a dinner party even though you don’t know what it realty means.
So, what is it really? How does it affect you?
What is Personal Finance?
Personal Finance is, well, everything revolving around finance. This can include investing, insurance, saving, loans, debt and budgeting. So when someone refers to personal finance, they are really referring to their financial life. Personal finance is a hip term that has gained traction in younger generations. This is due to the term accepting that finance is personal, rather than a cookie cutter as it has been perceived in the past.
No longer do you get a job, buy a house, invest in stocks and retire at 65. Most of us struggle to afford a house while we are young, and stocks may not be the best place to put your money. And don’t get me started on retiring at 65. Who has time for that!
How to dominate your Finances in South Africa?
We live in a very diverse country. This means we all have different needs and responsibilities. So each person is different and needs to have their own financial plan. And to dominate your personal finance, you need to have a financial plan. As Thomas Edison said, “If you fail to plan, you plan to fail.”
But what do you put into this plan? While everyone’s plan is different there are a few commonalities:
- Financial Goals: Do you want to buy a car? A House? Go overseas? All of these things needs money and having them in your financial plan is crucial. Plan how much you need to save and where you are going to put it.
- Investments: Planning out your investments and investing strategy is a good element to keep in your financial plan. If you need help with this talk to a financial advisor.
- Debt: Sometimes we need to take out debt to buy a car or a house. But having a plan and knowing when you will pay off your debt is a crucial element to add to your financial plan.
- Retirement: Knowing when and how you will retire is an important step to plan. Start early and plan for your retirement.
Personal Finance does not have to be a hip word that you don’t understand, it is a crucial part of your life. Everyone is different and has different needs, this is why it is recommend that you down with a registered financial advisor to discuss your future and personal finances.