Cut the miles out of reaching these finance milestones by taking a leaf from the experts’ books and building your bucket list
A finance bucket list is made up of defined milestones – so the first step in building one is to think about the goals you’d like to achieve. With these in mind, it allows you to action them more meaningfully by setting a timeline, and tracking your progress towards reaching them. As Lloyd Ellis, an independent financial planner at Solutions2Wealth, explains, a bucket list provides a strategy: ‘It motivates a person to have some sense of direction. From here, good saving and spending habits will usually follow.’ So to map out the road to your financial milestones and come out victorious, sort them into these four buckets:
According to a survey conducted by World Wide Worx from 2018–2019, 43% of South Africans are saving towards some kind of financial goal, with the most common goal for under-35s being a car, among other big purchases such as property and education. And if you haven’t already, there’s no better time than the present to join them.
But where to begin? ‘Have a comprehensive financial plan done with a qualified financial planner,’ suggests Sonja Linde, a certified financial planner at InSync Financial Services. ‘This will help you set goals and determine which milestones you would like to reach first. Make a monthly commitment to address these milestones, and stick to it,’ she continues. She also notes the importance of reviewing this plan on a regular basis, as circumstances change, so that the goals are still applicable to you.
Lloyd highlights the three most common savings goals he helps his clients reach: property, emergency savings and retirement. His advice? ‘First make sure you can pay off all your monthly expenses to maintain your lifestyle. You may be able to identify opportunities to reduce expenditure, which provides more financial freedom to focus on your milestones.’ Having an emergency fund equivalent to at least one month’s salary (it sounds like a lot, but you’ll thank yourself) is also a good safety net to keep in place if you’d like to avoid falling off the savings train should your regular income be compromised. Don’t live hand-to-mouth and spend your salary as you get it, cautions Henry Poulos, a registered financial planner and wealth specialist at Beta Wealth. ‘Work on your patience.’
Of all four categories, this is probably the one that sends your serotonin levels into orbit and gets you thinking about what your #BestLife looks like. And there is nothing wrong with that – you’re human, and you work hard for your money. The more effort you put into being financially responsible, the more freedom you have to live a little. The key is moderation and being savvy. Sonja agrees: ‘If you work hard to earn your money, you should be able to spend it on both appreciating assets and lifestyle “assets” such as a vehicle, eating out and holidays. If you make sure that you have addressed all the financial planning shortfalls first, then the money left over can certainly be used to enjoy life too.’
Henry points out that an expense such as rent could be swapped out for an investment bucket list item such as property. ‘It might seem cheaper and easier now to just keep paying rent, but a property goes up in value.’ Rather save for a deposit on a house, he suggests. ‘For example, if you want to buy a property for R1 million, have a goal to first save R150 000 to pay for the deposit on the bond and the transfer costs.’ It may sound unromantic and alot like hard work and discipline, but it’ll literally pay off in years to come.
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