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Good financial habits

sET You up FoR

A GooD FuTuRE

By Nirdev Desai, Head of Sales at PSG Wealth
i t is difficult to be disciplined when but with consequences to our long-

term savings. Preserving retirement
your salary increases. Building savings
habits, however, and giving them
the priority they deserve, assists in savings when changing jobs is non-
negotiable. If you take time off work,
avoiding the downward spiral of living you will need to make it up elsewhere,
beyond your means. This essentially either by saving more when you return
means that you don’t let lifestyle to work, or by working for longer.
inflation (spending more when earning
more) take over and set you back. Improved healthcare, leading to
longevity, might mean being able to
The longer you follow the pattern retire later. For every year you postpone
of spending more than saving, retiring, you are not only not using
the more you risk falling behind in your retirement savings to sustain
reaching your financial goals. you, but you also have a chance to
continue accumulating more savings.
WhERE shouLD You sAVE? But discipline needs to remain. It’s
A number of options are available, from important to acknowledge that many of
a retirement annuity (RA) to a unit trust our spending ‘needs’ are really disguised
(UT) discretionary portfolio, or a tax- the original plan – which is often the ‘wants’. Being able to distinguish
free savings plan. A qualified financial hardest thing to do. You may be tempted between the two, in favour of your
planner can help you determine which to live more lavishly as you get salary future self, can make all the difference.
set of products is right for your needs, in increases along the way. Remember that
line with your unique circumstances. these inflated living expenses potentially TAkE A WoRD oF ADVicE
erode your provision for retirement The value of good financial advice lies
ThE RiGhT pLAn is savings – and therefore you should far beyond selecting a product or fund.
TAiLoRED To YouR nEEDs revisit your financial plan accordingly. Rather, it lies in providing perspective on
Your own vision of financial freedom the challenges you face, and in helping
or reaching retirement early (or at a As TimEs chAnGE, You mAY to temper the emotional reactions that
reasonable age) might differ significantly nEED To chAnGE YouR destroy value. There are many challenges
to someone else’s. As with all financial ThinkinG in dealing with a world characterised
plans, the right plan is one tailored to Our framework for being able to by longevity, and filled with temptation
your needs. Your plan should also be accumulate savings has changed. and distraction from our financial goals,
revisited as your circumstances change. Employment flexibility from moving but a good financial plan, maintained
The financial planning process can help between jobs, or taking some time off, with the help of a qualified financial
you determine if changes are necessary, or even taking on more than one job, adviser, will go a long way towards
or whether you should rather stick to allows us to lead more rewarding lives, helping you reach your goals.

Waterfall Issue 3 2020 17