- Thinking you will only start saving when you have more money.
When I was in varsity, I had a part-time job that paid me peanuts (as most jobs do when you are in varsity!) but of that meagre amount, I decided I would put away R150 per month and I have continued with my little pot of savings even after university.
I know the situation is different for everyone but the point is, you have to start somewhere. Start where you are, with what you have. You never know when you will need the funds, either for an emergency or if you come up with a brilliant business idea that you could have self-funded had you been prudent with your savings… It’s all about commitment ladies.
- The Cinderella complex
Growing up, we often saw cartoons where the girl would wait for prince charming to arrive on his horse and whisk her away to live in a castle. Honey, if you are waiting for prince charming and not getting your money right, you are in trouble. Even if you do find your prince charming, a wise decision is to still be involved in the financial decisions of the household. As Samke put it “Don’t relinquish the financial health of your life or home to your partner” http://www.thedisruptors.co.za/2016/09/samke-ngwenya-dont-relinquish-financial.html
- Not saving for retirement
I know it’s hard to imagine yourself at the ripe age of 65, but the reality is, with medical advancements, people are living longer; more so for women who, on average outlive men by 5 to 10 years according to studies done by the World Health Organisation.
What this means is that whatever you have accumulated throughout your working life will have to stretch further in retirement. Imagine going on retirement at age 60 and living up to 95 years – that’s 35 years you will need to provide for!
You can start saving for retirement through your employer but over and above that, you can take out a Retirement Annuity with companies like Stanlib, Coronation, Allan Gray etc. who are very transparent with their costs. There are great tax benefits to Retirement Annuities as well.
- Not having a financial plan
No financial plan, no results.
I often see clients who think by earning a R1million salary or more automatically makes them rich. While this has some truth to it, oftentimes it means their net worth is not growing, which is the real measure of wealth. Because they do not have a clear plan for their money to build and increase their net worth, they basically live hand to mouth as well, just maintaining a lifestyle. With a solid financial plan, you are able to set clear goals and timelines to accumulate wealth. https://womanandfinance.co.za/do-you-know-your-net-worth/
- Taking on unnecessary debt
This one doesn’t need any explanation. Remember banks and companies that offer credit facilities are in the business of making money. From your credit card, overdraft or store clothing accounts, they are all trying to make money out of you. It is just simply not wise to purchase unnecessary items on credit, at the end of the day, you will end up paying almost twice the value for the items. DO NOT DO IT, you are too smart and savvy for this. The feeling of happiness from instant gratification does not last either.
By avoiding these mistakes you are more likely to reach your financial goals faster than someone who makes the mistakes. Stay the course. You will thank yourself.