Cinderella and the Quest for a Blesser

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Money is the single biggest reason why so many fairytale marriages end unhappily ever after. But the underlying causes are complex, and bring the story of Cinderella right into the modern era. So what, then, is the best way to make money and a relationship work?

By Maya Fisher-French

After a talk I had given at a Women’s Day breakfast, a woman in her early 30s came to chat to me about an issue that faces many financially independent women.

My talk had been about the “Cinderella Complex” and a woman’s unconscious or conscious desire to be cared for by a man.

I’ll call her Thobeka. (It’s not her real name, as is the case with all the other women in this story.) As a single mother, Thobeka said that unlike many other women in her situation, she was not convinced that a man would be a Blesser, a term used to describe a sugar daddy.

Thobeka’s issue was that she had worked very hard to become financially organised and to support her child on her own. “I don’t have debts and I have investments. What if I meet a man who is a spendthrift or arrives with debt?”

Money is a minefield that couples have to face and navigate between the roses and racing heartbeats. Considering that money is the biggest reason for divorce, how you handle money as a dating couple could be a predicator of how you will manage money as a committed couple.

A couple of years ago I had a conversation with a family friend, who in her early 20’s, had started to date a guy quite seriously. Angela’s concern was his money attitude. He always split the bill when they went out and never offered to pay in full.

She faced the challenge that as she was several years younger than him, her earnings were not on par with his. So going out for dinner several times a week or the choice of venue could put substantial strain on her budget if they went 50/50.

I suggested to her that she be honest and tell him that while she loves going out for dinner with him, she can only do what is affordable for her. If there is a fancy restaurant he would like to go to, he would have to foot the bill.

The relationship continued long enough for them to move in together. They set up a budget where she contributed a percentage that represented her earnings relative to his.

But she couldn’t handle his budgeting and financial prudence, she wanted to be more exuberant and spontaneous. Ultimately the relationship ended, and here is the rub – she is now dating a man who loves spending money on her. As a classic Cinderella, she found her Blesser and is very happy about it.

Ultimately, relationships are about personalities. A couple made up of a spendthrift and a saver may find a perfect balance where the spendthrift is protected from their worst financial mistakes, but the saver learns to enjoy life a bit, as long as both appreciate what each other is bringing into the relationship.

Someone who loves spending money and someone who loves having money spent on them will also find compatibility, unless the money, or credit line, runs out.

For others, the difference in their money attitudes may just drive them insane, or can be used as a power-play in a relationship – especially if there is a difference in the earning power. As they say, “he who holds the gold, makes the rules”.

In another conversation, Carol had recently married and the newly-weds moved in together. Both were on their second marriages with grown children and had gotten used to living their own lifestyles. Her husband earns a modest income and has simple tastes and needs while Carol is financially very well off and enjoys the good things in life.

After moving into their new home Carol starting buying new furniture, making minor renovations and generally spending money. Within a couple of weeks, she noticed that her relationship was not going that smoothly, especially in the bedroom. The problem was the shift in power that her money created.

The reality is that while most women do not have a problem with a financially successful partner who enjoys spending money on them, for some men, a financially stronger partner can make them feel emasculated. This is going to be a challenge in many relationships, as more women become the main breadwinners.

Some women like Carol will want to spend on their partner, women like Thobeka will be afraid that a financially less astute man will bring her down and women like Angela will still want a man who can spoil her. So when you fill in those online dating questionnaires, the most important attribute may just be a synergy in the way you view money.

*Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

The Anatomy of a Scam

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When it comes to investing your hard-earned money, beware of any scheme that seems too good to be true. Because the truth is, it probably is, as many people discover to their cost. Here’s one real-life example.

By Maya Fisher-French

There are so many rogues out there using charm and manipulation on desperate people looking for better returns. Tammy is one such victim and she kindly and bravely, shared her story in the hope that it acts as a warning to those who still do not believe that when it seems too good to be true, it really is.

“I really never thought it would happen to me, I thought I was fairly financially astute. How wrong I was,” Tammy says about her experience of being fleeced to the tune of hundreds of thousands of rands in a Ponzi scheme.

As with most schemes, it all started with a referral from a family member. “My mother one day started telling me how a very good family friend of ours was making a lot of money off an investment.”

Both Tammy and her mother had money invested in unit trusts, but the returns the friend was getting were so much better. Too good to be true – as it turned out.

The family friend in question had a neighbour who claimed to be a futures trader. “Our friend had given this trader almost a million Rand and had been receiving monthly payouts of around 19% a year on the investment – that was just in interest not the capital. We all thought, ‘what a find!’ and invited him to our home. He sat in my lounge in my humble apartment and met my kids. He was informed that I was giving him some of my life’s savings. He understood what this R150 000 meant to me,” says Tammy.

Her mother had told so many of her friends about this great ‘Futures Trader’ that collectively they had invested around R2.5-million.

It took time to receive any investment documentation and Tammy and the other investors were told to leave the investment to grow. They were also told that if they needed any of the money soon he could not guarantee where the market would be and they could incur losses.

This is fairly normal for any market-related investment as markets can fall over the short term, but it did not tie in with his story of providing a 19% per annum income return as initially suggested.

Although Tammy did receive some money from time to time, she started to feel uneasy. But then after two years of no returns they started to suspect something was seriously wrong.

“The rands began to drop and we realised we could not get hold of this guy. He never returned our calls, he would then return the calls but be in a meeting so couldn’t talk. Then we would email him with notices wanting our money back.”

From time to time he would give them a small carrot in the form of a small cash payment. “We would cling to this gesture of goodwill because we did not want to fully acknowledge that we had given our precious savings without any proof or finding out that this man was who he said he was. We went blindly on trust. It was such a wonderful feeling to trust, but so awful to be betrayed.”

Tammy also had to acknowledge the role of their good family friend. He was at the top of the scheme and had been the bait, with his initial payouts, which had caught the rest of them because they trusted him.

“Once we realised the brutal truth, our money was gone. Then began the frantic attempts to recover it, throwing good money after bad, paying lawyers to investigate which all cost more than it was worth.”

Only at this stage did Tammy do the research she should have done in the beginning. She contacted the Financial Services Board (FSB) and discovered the trader was not registered.

All she had was his ID number which was of no use. The bank they had deposited the money into was not interested that their client had committed fraud. “The fraud division would not even return my calls,” says Tammy.

Eventually Tammy realised she had to write the money off. She was at least in a position where she was still relatively young and still earning an income, but the same was not true for other people in the group. “Some had invested all their life’s savings. What kind of heartless person could do this?”

Her last act was to report the man to the police. It appeared a hopeless task. “I had already phoned all the relevant crime divisions for white-collar crimes in the country, but no-one knew the correct process or procedure to lay a charge against this criminal.”

Tammy then went to her local police station, where it was a similar story: no-one seemed to understand the crime that had taken place. “I must have stood in the police station for an hour trying to explain my situation. Eventually they gave up on me and I went home.”

Fortunately, in a conversation with a community leader Tammy was given the name of a senior officer at the police station who advised her to get the whole group of investors together to lay a charge under one case number. He told her that the larger the sum defrauded, the more likely it would be viewed as a fraud case and investigated at a higher level.

Tammy heard nothing for about 18 months, then out of the blue she received a call from an advocate who told her the man had been prosecuted and had reached a settlement.

The agreement was that if the complainants were willing to accept the terms they would each receive R100 000 followed by monthly amounts until the debts were repaid. So far he has kept to his agreement.

“What a journey this was, but my message to anyone who is scammed, is don’t just give up. Report the matter. Justice may take its time, but it does work.”

Tammy has been extraordinarily lucky ‒ partly due to her tenacity. Very few victims ever follow through or ever see their money again. 

How to spot a scam

They are not widely advertised on mass media platforms. They rely mostly on word-of-mouth by usually using a few people as “bait”. The early investors receive “too good to be true” returns and then convince other people to join.

The returns promised are always well above what you would expect from a normal investment but when the investment returns do not materialise, there is always some clause in the documents that says “these are projected and not guaranteed” even though it was sold as a guaranteed or low-risk investment.

They are not registered with the Financial Services Board or the South African Reserve Bank, and are not authorised financial services providers. Promoters or brokers are not registered with the Financial Services Board as qualified brokers.

The initiators are not accountable to anybody and can disappear at anytime.

The schemes do not have a corporate organisational structure (CEO, directors).

They do not provide any real proof of investment of your money (ie. investment certificate); sometimes they will issue you with a piece of paper with a logo, but this means very little.

They may offer a guarantee to get your money back if you are not happy with the investment. This guarantee is nothing but words on a piece of paper. Anyone can promise you a “guarantee” – it means absolutely nothing unless there is a bank underwriting it.

* Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

Get Ready for the Holiday of a Lifetime!

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After a year of sweat and toil, you’ve earned your holiday break. So don’t let the planning for your holiday make you sweat and toil even more. Plan well ahead, and you’ll be able to enjoy every moment of your well-deserved getaway.

By Maya Fisher-French

I recently returned from an overseas trip that I started planning nine months ahead of time. I used the time to plan, budget and make sure that when I returned from my well-deserved break, there would be no scary credit card bills to deal with.

One of the benefits of planning ahead is that you are able to spread your payments over time. This is how I made sure my holiday was booked and paid for before I got on the plane.

 

Nine months before travelling: book your airline ticket

The earlier you book your air-ticket the cheaper it is. I used travelstart.co.za which gave me the best price comparisons. I booked through my credit card for convenience and also for the free travel insurance.

Another benefit of booking with a credit card is that you are also covered if the airline goes bust under a charge-back where the transaction can be reversed if the goods or services are not delivered.

As I already had funds to cover the ticket, I transferred the money into my credit card. Ideally you want to have saved the money to pay for the tickets, but if you have to spread the cost, make sure it’s only over one or two months.

 

Eight months before travelling: start putting money aside for spending

I calculated how much day-to-day spending money I would need and started building that up in my credit card. I don’t get foreign cash before leaving on an overseas trip as I just draw cash when I arrive at the airport , although this once did backfire when the ATM was offline.

I also don’t find the pre-paid currency travel wallets that cost-effective. But my main issue is that for both foreign cash and travel wallets you have to fill in forms with the bank and provide your air-ticket and passport – it’s an unnecessary additional hassle.

The risk is that our currency takes a nose-dive during your trip, but it could also strengthen. I take the view that I have already spread my risk by paying for my trip over nine months.

 

Six months before travelling: book your accommodation

Now that your ticket is booked and paid for, you can pay for your accommodation. Airbnb has made travel so much cheaper but I also used websites like booking.com and tripadvisor.com to get realistic reviews on places to stay.

In some cases you can just pay a deposit but I opted to pay the accommodation in full (refundable if I cancel before a certain time) as this took away currency risk.

With the rand so volatile I used an opportunity of rand strength to effectively peg the cost of accommodation. It also means that six months before I leave, both my accommodation and flights are paid for.

 

Three months before travelling: book car hire/transport

Again this is about spreading out the cost of the overseas trip and also taking advantage of rand strength. If you are using reputable global car rental agencies, you can comfortably book online and make payment. There is a refund option if you cancel in time.

I always opt for the full insurance package with no excess. It is a lot more to pay, but once when a driver went into the back of me while I was travelling abroad, I was very glad I didn’t have to worry about handling the excess in a foreign currency!

I also included wi-fi in the car – this allowed me to use my phone for navigation and generally provide free wi-fi.

I also booked a train trip online with a great online booking service, loco2.com, which covers and compares all modes of transport around Europe and the UK.

 

One month before travelling: book your tourist activities

Most major tourist sites allow you to book tickets online and this way you also get to jump the booking queue. Many top attractions have timed entry tickets which can actually sell out weeks in advance, so it makes sense to get in early.

A month before you travel you should already have a good idea about your itinerary, since you’ve already been researching for eight months!

 

A week before you travel: sort out insurance

You will receive free travel insurance on your credit card, so make sure you have the relevant contact numbers on your phone. Also make sure you know what the insurance covers and whether it is worth topping up.

Most free travel insurance is fairly basic and has limits to the cover provided. Make sure you read the fine print, such as the fact that you are not covered if you are 75 or older or for pre-existing health issues.

Top-up insurance provides higher levels of cover, including cover for pre-existing conditions, no/less excess payable on claims and also additional benefits such as cover for loss of baggage, travel documents and cash.

Also inform your medical scheme that you’ll be travelling abroad. They will cover medical expenses up to a certain point and may also offer free travel insurance, which I signed up for.

This is also a good time to inform your bank you will be overseas, as any transactions on your card outside of the country may trigger a fraud investigation and you could find your card has been stopped.

With careful planning and budgeting, an overseas trip does not need to turn into a financial liability.

 

*Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

If You Value Your Children, Teach Them the Value of Money

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The biggest gift we can give our children is not that brand-new smartphone or a luxury holiday by the sea. It’s an understanding that learning to look after your money is a legacy that will last a lifetime. By Maya Fisher-French

When you become a parent, you are faced with the reality that you have to form a value system within which you will raise your children.

In a world that has become increasingly materialistic and where people are judged not on the content of their character, but on their exterior image, how do we raise children to be financially sensible and to appreciate how much they have?

Upon hearing that I was buying a cellphone as my son’s birthday present, an acquaintance asked me “are you getting him an iPhone”? No, I am not buying my 16 -year-old son a R13,000 phone!

The reality is that some of his friends do have iPhones, but some do not. My son is not particularly brand conscious so it is not an issue, but if it was, that is the sort of thing he would have to buy himself.

If I raised a child who believed that his whole social well-being depended on the type of cellphone he had, I would have failed my own value system.

Need vs Want

Then again, my younger son told me that he “needed” the latest PlayStation because the game he played at his friend’s house is only available on that platform and not on his Xbox.

I just laughed and said: “Really? Need?” Fortunately I did not launch into the “you spoilt child” speech that was forming in my mind because my son understood exactly what I meant. He understands the difference between “need” and “want” and why that matters.

I have found that the best defence against so-called peer pressure and children’s demands is to bring them into the real world when it comes to money.

Most children have no real idea of what things cost relative to the income coming into the family. They also have no idea of how much it costs just to live each month!

I don’t have all the answers and only time will tell if the financial education I impart on my children will bear fruit one day, but I have formed some sort of plan and value system and so far my children seem to be on board.

It’s okay to talk about money

We talk openly about money and finances. My children know we have a budget and what we are budgeting for.

For example, my sons know that this year our goal has been to replace our old car (and they know that we only buy cars for cash) so other luxuries will take a back seat.

We set limits on how much we will spend in total on birthdays, including the gift and party, and only pay for one additional extra mural a term, so they have to choose carefully which extra murals they want to do.

They are hardly deprived, but setting limits creates the awareness that money is a finite resource and they have to make wise decisions on how it is spent.

The best way to learn is by doing

My children received pocket money from a young age, and through this they learnt to save up for things they wanted. Probably the best lesson they have learnt is that by the time they have saved for the item, they no longer want it – their interests are short-lived.

As a result they have more money saved than they planned. As adults, too often we are still paying off our credit cards long after the enjoyment of the new purchase has faded.

What children really want is financial security

Living beyond your means in order to give your children a lifestyle you did not have, is not a gift. It is a burden.

Believe me, I was raised in a household full of financial stress so I know that children can feel the stress in a household and it will create negative money memories for them so that in adulthood they may inadvertently repeat the pattern.

Showing your children you are in control of your finances is the best way to make them feel safe. Share with them how money in the household is allocated and allow them to have some input into the budget allocations.

It will make them feel empowered and also make it easier to have the conversation around “wants” and “needs” and how they can work towards their “wants”.

Part of that security is making sure I have sufficient insurance in place to provide for them if I am unable to contribute to the family financially. I have also worked at putting away money for my retirement so that I do not have to depend on them in old age.

Leaving a legacy

My father died when I was still young and we were left in financial dire straits. There was certainly no inheritance or financial legacy, but I did still receive a good education.

That was invaluable and has allowed me to build my own future. We have one overriding financial priority when it comes to our children: providing them with best education we can afford.

Afford, however, does not mean taking on debt or neglecting our savings; it means other financial sacrifices like not driving new, financed, cars.

* Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

* The opinions expressed in this piece are the writer’s own and don’t necessarily reflect the views of BrightRock.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

The High Cost of Tying the Knot

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Whether you settle for a quiet get-together with family and friends in the garden, or a lavish weekend do-I-do at a manor house in the country, getting married is an expense that could put that richer or poorer pledge to the test before you even say your vows. Here’s how to handle the budget on your Big Day


Marriage is a contract between parties, and few parties are as significant as the one you hold on the day you get married. “For richer or for poorer,” runs the pledge, the latter being the likelier option once you’ve tallied up the bill.

Unless, of course, like the Russian oligarch who spent $1-billion on his daughter’s wedding – he hired Sting and Jennifer Lopez to sing at the reception – you have no need to trifle with budgetary constraints.

For the rest of us, who have to make to do with the guy who runs the local mobile disco, the big question, next to whether or not we take our beloved to be our lawful wedded spouse, is whether we can afford to get married in the first place. Well, of course we can.

The cost of living happily ever after is always negotiable. All you have to do is start with your ultimate fairytale fantasy wedding, and bring the budget down from there.

To get a sense of what that means, we invited three experts in wedding affairs into the BrightRock studio, to share their thoughts in an Iris Session with David O’Sullivan.

On the couch: wedding planner Khali Collins, owner of The Wedding Specialists; and Mike Sharman, co-founder of the ad agency, Retroviral, who recently tied the knot with his wife, Taryn. And beaming in from Cape Town, our resident financial commentator and common sense adviser, Maya Fisher-French.

As Maya sees it, wedding planning should not be seen as something separate from financial planning.

“You need to ask yourself, what are your goals and aspirations? If a wedding now means not being able to put a deposit down on your dream home, is that the decision you want to be making?”

If you borrow R100,000 for the wedding – and a lot of couples are now financing their own weddings, says Maya – you’ll be paying off R5,500 a month for the next three years.

Better to scale your wedding realistically according to what you can afford, advises Khali. The most expensive budget she’s had to work with was R8-million, but on average, you can look at spending between R2,000 and R2,500 per wedding guest.

“Some clients do want a champagne wedding on a beer budget,” she says, but you can manage your costs by taking a good look at what you really need on the day. Do you really need a bottle of red wine and white wine on each table? No, says Khali. Rather make it an option on the menu.

“What’s more important to you? Do you want to focus on the drinks and people having fun, or do you want to focus on this great lavish dress? Where are you prepared to spend money?”

For Mike and Taryn, who both work in advertising, the answer was to approach their wedding with the same attention to detail and cost as they would approach a campaign for a client.

They broke their wedding down into “pre-production, “production”, and “post-production”, incorporating every element from the bachelor party to the service to the reception.

“We sat down and discussed all the items,” says Mike, “and then unfortunately you have the miscellaneous line item which continues to grow and grow as that big day nears. It was important to start off with a base of, what are we trying to achieve from this day, from an execution point of view? What is the delivery?”

Being in the industry also brought other benefits, such as the gift of a day’s free videography from a friend who also works for an ad agency.

“You have to strike that balance between affordability and the wedding of your dreams,” says Mike, who thoroughly researched options for a venue online, before settling on Old Mac Daddy, a retro-hip “trailer farm” in Elgin in the Cape.

Hosting your wedding in an out-of-the-way place is also a good way to put a cap on numbers, laughs Mike, because only your true pals and close family will make the trek.

It’s now become commonplace for couple to start their wedding planning on social media, says Khali, although that can create false expectations of a “Pinterest-perfect” wedding.

And that’s just the trouble, adds Maya, who happily admits that she rented a wedding dress for her big day, rather than splash out on tailor-made garment that she would only wear once.

“Don’t place your entire happiness on one perfect day,” she advises. “Go with the flow. Enjoy it, celebrate. And if it pours with rain and the cake collapses, don’t worry about it!”

Whatever the budget, wherever the venue, whatever the table settings, it’ll still be a day you’ll remember all your life, for all the right reasons.

For more advice and insight on planning your wedding day, visit the Change Exchange, our breezy online portal for everything you need to know about the Big Change Moments in life: Tying the Knot, Starting a Family, Landing That Job, and Making a Home.

** The opinions expressed in this piece are the Iris Session participants’ own and don’t necessarily reflect the views of BrightRock.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

How Your State of Mind Defines Your State of Money

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The way we think about money, and especially, the way we don’t think about money, can have a huge impact on the way we live our lives. What do you need to do to move from being a “survivor”, struggling with your everyday finances, to becoming a “master” of material matters? An intriguing new book reveals all. By Maya Fisher-French

Someone recently related a story to me about a member of his community who had fallen on hard times and had lost everything. He had gone from being an ultra-wealthy businessman to struggling to make ends meet.

He had come to his friend for some advice on what to do about his financial situation. The friend replied that he had to sell his R2-million investment car. Not only could he not afford to keep up the insurance payments, but it would generate cash he could use to settle other debts.

The businessman refused, stating that in order to be successful, he had to look successful. He believed his car made other people see him as important, because without that car he would be nobody.

This story came to mind when I was reading Mavis Ureke’s book, Managing Emotions for Financial Freedom, where Ureke talks about the extent to which we equate money with emotional wellbeing.

As Ureke points out, while one has to feel worthy of financial success to achieve success, you do not have to achieve success to feel worthy. Yet this businessman’s entire self-worth was dependent on how he was viewed by his community, because like so many people, his self-worth was dependent on his financial success and when the finances went wrong, his entire world fell apart.

Ureke goes on to talk about how so many of us equate success to lifestyle or status, and how success is tied to the lifestyle we live, the car we drive and the clothes we wear.

“A person may decide to look like it, pretend they have it, act as if they have it and the underlying belief might also be that if you look successful then you will be successful,” writes Ureke.

The point Ureke makes so well in her book is that we need to understand the value system we attach to money and also learn that having money – or not – does not determine who we are as people.

Ureke sees money as an energy which is in constant flow, so sometimes we earn it, save it, spend it or lose it. One thing we know from watching people becoming millionaires overnight, is that money does not bring happiness.

This does not mean that Ureke doesn’t believe in financial success. Quite the opposite. The book was born out of her own personal journey of taking control of her money and moving out of financial chaos. She realised that her money mistakes would never end unless she understood why she made them and why she continuously sabotaged her financial stability.

Ureke defines financial freedom not only as a physical state, where one has enough money not to work or knowing that you won’t be a burden on your children, but in having the “ability to manage the money you have in such a way that it does not leave you with anxiety, regret, anger, shame and fear.”

Ultimately, she says, financial freedom is when you are “not a servant of money but money is instead your servant, meaning it obeys you, and when you say come, it moves towards you.”

As you can gather, this is not your traditional finance book. It doesn’t teach you how to budget or invest, but rather deals with the reason you may not be reaching your financial goals and how you are subconsciously sabotaging your own success.

This requires some deep reflection of our own money values – values that have been ingrained in us from a young age through the way our families managed money, or personal experiences where we perhaps suffered a financial loss. So it starts with understanding who you are and what it is you value.

Ureke also uses the “Seven Levels of Awareness“, used by leadership coaches, to assess your personal level of money awareness. Based on a questionnaire, you can assess whether you manage your money as a survivor, conformer, aspirant, individuator, disciplined, experiencer or a master.

For example, a “survivor” is someone who ignores money problems, has fallouts with family and friends about money and tends to be a compulsive buyer. Ureke describes this level of awareness as someone who sees themselves as a victim, someone who blames other people for their financial predicament and shifts responsibly to external circumstances.

An “aspirant” would be someone like the businessman with his high-performance car – someone who believes you have to look successful to be successful, where status and lifestyle are important. These people tend to live beyond their means. Ureke describes this level of awareness as one in which the person has an aspiration but lacks the necessarily inspiration to achieve what they desire.

An “experiencer” is someone who is at peace with what they have achieved so far, is open and honest when talking about their money, has several investments, and has educated themselves on personal finances matters. The challenge for this individual is to move into the “master” phase where they become leaders and mentors, sharing their experiences and leaving a legacy.

Through each questionnaire, Ureke provides ways to help you break the cycle and to alter your behaviour and belief around money so that you can move to a higher level of awareness.

* Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

** The opinions expressed in this piece are the writer’s own and don’t necessarily reflect the views of BrightRock.

This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

Footslogging Your Way to Fortune

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Going for an early morning run is hard work. Who among us wouldn’t rather hit the snooze button and drift back into dreamland? But in the long run, the self-discipline and commitment will pay off, and the same applies to your financial goals. By Maya Fisher-French

I recently required surgery to my ankle after sustaining a serious injury. Thanks to this ongoing ankle saga, if I ever want to be able to hike and run again, I am going to have to commit to some serious rehabilitation work. This involves spending 20 minutes each day strengthening and increasing the flexibility of my ankle.

This is chronically time consuming, not to mention phenomenally boring. Who honestly has 20 minutes to spare every day, or quite frankly wants to spend those spare minutes with a resistance band wrapped around your foot attached to the leg of a table? Let me tell you, it is hard work and it hurts!

In order to fit this exercise into my daily schedule as a working mom, I have to get up half an hour earlier than my kids, so my exercises are done before the morning chaos starts of getting kids dressed, fed and packed off to school.

And I love my sleep. I am the sort of person who could hit the snooze button endlessly. Yet I have this goal and it’s a really, really important one. My regular 5km runs and going on hikes are my passions in life; they are what keep me sane, with the added benefit of keeping the fat rolls under control.

This means I have no choice but to apply myself, because the bottom line is that no amount of physiotherapy visits or anti-inflammatory medication is going to help me reach my goal. Only my own hard work and dedication will get me there.

Getting out of debt or reaching some other financial goal is pretty much the same.

You can buy as many self-help books as you want, read dozens of articles on money management and attend endless seminars, but until you put the time aside to draw up a regular budget, and unless you find the discipline to stick to your goals and make a real commitment, you are never going to reach that goal.

It will not be an easy journey, and there will be lapses. There are days I skip my morning routine and even worse, days where despite all the work I am putting in, my recovery seems to be going backwards rather than forwards.

It is often a matter of two steps forward, one step back. But I persevere and find the motivation more often than not from the beauty that surrounds me. It reminds me that my need to walk in the mountains of Cape Town is far greater than that extra bit of sleep or self-inflicted pain.

If you are on a financial journey, find that motivation. Set a goal and imagine what it will feel like to reach it. Know too that it will not be an easy journey, but in the end it will be far more rewarding than continuing to spend money on stuff you really don’t need.

* Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.
This article first appeared in The Comet, an online platform by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

Psssst … want to earn some extra cash?

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Cutting expenses isn’t the only solution when it comes to balancing your budget. If you’d love to earn a little change to boost your regular income, put these opportunities to the test. By Maya Fisher-French

With everything from interest rates to tax to electricity and petrol increasing faster than our salaries, it’s not surprising that it’s becoming more difficult to make ends meet. If you’ve stretched your budget to its limit, it’s time to start thinking out of the box to find ways to make extra cash.

Join the Pay-per-Task Revolution

Pay-per-task websites have transformed the work environment by creating platforms where companies or individuals list jobs that can be done remotely.

This phenomenon has been coined “crowdsourcing” and is usually used by small-and-medium-sized companies to hire skills around the world. For example, a South African company may enlist the skills of a writer in India to do their press releases, or a company in the UK may hire a South African to design a new website. These are all contract based without the need to ever sit in an office.

Some freelancers make their livings off these sites, but many full-time employed people moonlight in the evenings or weekends to supplement their income.

Develop Your Freelance Skills

If you have skills such as programming, graphic design, proofreading, writing, typing or even book-keeping, there are loads of opportunities for freelance work on websites like upwork.com or peopleperhour.com.

The downside is that many thousands of people are using these sites, so competition is fierce. You may have to accept lower-paid jobs initially, until you have built up your online portfolio and positive reviews.

Ros Brodie, a freelance copy-editor and proofreader who uses upwork.com, recommends that if you don’t have specific and in-demand skills, you may want to price yourself very low when you first start.

“Since you have no work history or ratings, price is the only factor you can compete on. Try apply for jobs that have some sort of ‘test’ attached to the application ‒ this will allow you to prove your abilities and show the quality of your work.”

The more good work you do, the better your reviews, and the likelier it is that you’ll get more work. Of course the opposite can also apply ‒ a negative review would hurt your chance of future work.

Payment is done via PayPal, and you can withdraw the funds to your local bank account. Be careful of scammers. No site will ask you to pay a registration fee, though some do offer a premium service for a small monthly fee. They  make their fee by taking a percentage of each job.

Become a Mechanical Turk

Sites like clickworker.com and Mechanical Turk have tasks that involve data capturing, texting, researching, categorising and tagging of data.

Mechanical Turk, run by Amazon for their own website, hires people for internet-based tasks. They run what they call Human Intelligence Tasks, where you are given a time period to complete the task and the amount of money paid is clearly indicated. After the requester approves the work, the money is deposited into your Amazon payments account.

The tasks include filling out a multiple-choice survey, checking if two products look the same, finding the Twitter account of a website URL, and categorising images.

The amount paid is very small, often less than a Rand, so you need to do several in an hour to earn any real money.

Trent Hamm, author of The Simple Dollar, tested Mechanical Turk to work out how much he could make in an hour. He made around R80, which is not a bad income to make on the side.

His recommendation is that since the tasks require a very low skill level and are often repetitive, the work is best done in sporadic bursts during the course of the day.

He recommends avoiding very low-paying tasks but refreshing frequently to see what new tasks are available, as well paid tasks go quickly. Writing tasks are better paid, so if you can write quickly, especially on a topic you’re familiar with, you could earn a better rate. By completing an online test, you can earn a qualification that makes some higher-paid jobs available.

Become a Helper for Hire

The US has several sites where people and companies can post small jobs, tasks and errands such as collecting laundry, summarising a lecture, and finding a string quartet for a party. These sites are designed for students who have a few spare hours a week to help people who are too busy to get the day-to-day stuff done.

In South Africa these sites are not as prolific. But if you have a car and can run errands, list your services on websites like Gumtree and OLX, or work on word of mouth. A word of warning: there are some strange people out there, so vet them carefully before you take on the job.

Drive someone home safely

As South Africans become more aware around drinking and driving, many driver-assist businesses have opened. There is a high demand for part-time drivers to work a 12-hour shift over a weekend.

Unlike a regular taxi service, in the driver-assist model the driver is dropped off at the location by a ‘chaser’ and drives the client home in the client’s car. The ‘chaser’ follows and collects the driver once they have dropped the client at home. This means there is no need to have special insurance or a public driver’s license.

Drivers and chasers do need to submit to drug screening on request and are subject to background checks. As the driver, you would usually go on a training course before being allowed to drive clients.

Some companies pay a set fee for the 12-hour shift, while others pay for each trip taken, with a minimum booking fee. Over and above the booking fee, a driver can make good tips. Alan Wheeler of Cape Town based service Drunk Drivers says tips can be around R300 a shift.

Make Your Home famous

There is a huge demand by film and photography crews for locations for photoshoots, especially in Cape Town. You don’t necessarily have to have a designer home, as many producers are looking for ordinary homes to shoot commercials for products such as washing powder and tea bags.

Jeanne Watson of Shootmyhouse says the weak Rand is making South Africa a top destination for international adverts. The catch is that the house needs to be easily adaptable for an international look.

“We are looking for homes that are fairly generic but that are open plan with a lot of space, where small changes can be made to suit the requirements,” says Watson, who adds that kitchens tend to be most in demand for shoots.

The photographic crew may need to make some changes to your home, such as putting in additional counters or putting up blinds, but these are all rectified after the shoot. Watson says insurance is taken out by the film company to cover damages but in her experience this is seldom required as crews are very careful. A generic home for an average commercial can earn between R8 000 and R10 000 per day.

Before signing up, you need to submit photographs of your home. If it meets the criteria, professional photographs will be taken and your home would then be listed on the site.

This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes. The opinions expressed in this piece are the writer’s own and don’t necessarily reflect the views of BrightRock.

 

 

What Would You Do If You Won the Lotto?

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We all know that our chances of winning the Lotto are as remote as, well, our chances of winning the Lotto. But there’s no harm in dreaming, especially if you can turn your dreams into goals. Here’s how. By Maya Fisher-French

Our family has a game where we write down what we would do with our money if we won the lotto. This is not just a fruitless exercise of “what if”, because it does show us what is important to us – what our dreams really are.

Apart from the obvious ones like paying off your bond, there are always value-based ideas that are different for each person.

 

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Giving to charity

The portion of my Lotto winnings I would give to charity would help more children receive an education. Education is important to me, so rather than waiting to “win the lotto”, I started a monthly debit order to the Peninsula Feeding Scheme, which feeds children across the Cape Peninsula.

With food in their stomachs, children are better able to learn, and knowing they have a meal waiting for them at school makes them more likely to come to school. I didn’t need to win the lotto to start making a difference.

 

Flying Business Class

On the pure luxury side, I want to be able to fly Business Class when I travel abroad. If you’ve ever compared the cost of a Business Class ticket to Economy, you’ll realise you need serious cash to reach this goal.

I thought about it for a while and realised I could do this through air miles. As I fly a fair amount locally for work, by committing myself to one airline for all my local travel, I could clock up enough points to upgrade to a Business Class ticket at least every second year.

Then I realised I could boost these points by opting for a credit card tied to the airline’s rewards programme. This means I could upgrade my husband rather than having him sitting behind the curtain in Economy class – that may have been a marriage breaker.

So I signed up for a credit card that will boost my points. It was very easy to do and the questions around my living expenses were laughable, but that is for another column.

I will pay the amount I spend each month on average into the credit card at the beginning of the month. This means I’m not going to end up with a massive credit-card bill.

My goal here is to work the system, not have the system work me. By focusing all my spending through the single card, I can work on my goal to travel Business Class without winning the lotto – the odds are far more favourable!

What are Your Lotto Dream Goals?

So how about playing the “if I won the Lotto game” for yourself? You just might find innovative ways to fund your dreams. Here are a few ideas.

I want a better education for my children

Join your school’s governing board and help improve the school. Find out about bursary schemes at schools you feel are right for your child. Consider extra lessons if you want to supplement your child’s education.

I want to take my family on an overseas holiday

Have you ever noticed how many competitions there are for family holidays? Spend a year entering all the competitions you can find. Make sure they are legit, and set up a separate email address so you don’t get spammed.

 

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I want a new car

Ditto on the new car. Start entering competitions.

I want to leave my children an inheritance

Start a tax-free savings account in their name. If you put just R500 away each month into a fund growing at 10% a year it would be worth R380 000 in 20 years’ time – all tax-free.

I want to change the world

There are so many charities and non-profit organisations that need time more than money. Offer your time and skills.

 

 

I want to take a year off and travel the world

There are many options. If you save 20% of your salary and invest in a fund that returns around 10% a year, you will have a year’s salary put away within four years.

There are volunteer programmes across the world where you get free food and lodging for helping to build a school, for example. You get to travel and do good.

Do a six-month house swap or build up a reputation as a trustworthy housesitter and sign up with a global housesitting service. Start investigating. You’ll be amazed at the options.

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I want to be debt free

No matter how much money you won in the lotto, if you’re drowning in debt now, chances are you’d be back in the same position within just a few years.

If you’re not managing your money now, you never will. Start by cutting up those store cards and credit cards and committing a few hundred rand extra each month to repaying those debts. You will be amazed at how quickly your finances improve.

* This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes. The opinions expressed in this article are the writer’s own and don’t necessarily reflect the views of BrightRock.

 

 

 

How Does Maya Manage Her Money?

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We chat to the popular financial columnist and author whose sound advice on saving and spending money can help turn your small change into a small fortune.

 

Imagine a world without money. For some among us, especially as the month draws towards its end, that probably doesn’t require too much imagination. But money, whether it’s in plentiful supply or in the throes of a drought, is the force that makes the world go round, which is why it is so vital to our everyday living as well as our long-term plans.

So imagine, instead, a world with enough money to satisfy your needs and make your dreams come true. Then start working towards it, using common sense, discipline, and the accumulative power of change.

This is where Maya Fisher-French comes in. With a solid background in trading and investment, Maya has become one of South Africa’s most trusted and easy-to-understand advisers, and her new book, Maya on Money, Implement Your Money Plan, is a common-sense guide to conquering your financial fears and making the most of your money.

We caught up with Maya and asked her what money means in her own world, and what she has learned from her own money mistakes.

 

Q: What is your earliest childhood memory of the meaning of money?
For me, growing up money felt like a power play in our home. I think for many families money continues to be about power. It is one of the reasons I feel so strongly about women remaining financially independent.

 

Q: Were you a good saver as a child, and if so, what was your most ambitious savings goal?
When I was 15 my father gave me a Bob-T card in which he had put six months’ worth of an “allowance”. It was the most liberating feeling ever! I went straight out and bought a jersey I really wanted, and then realised I had blown at least two months allowance on it. I then asked my parents to please give me my allowance in monthly instalments.

 

Q: What do you love most about change?
The opportunity it creates – when one door closes another always opens, and you suddenly realise this was all meant to be.

 

Q: What’s the best investment you ever made?
In monetary terms, it was buying our first home in 1997. Interest rates were at their all-time high, and we struggled to meet the mortgage payments. But then interest rates plummeted and property prices re-rated completely. Our property value quadrupled. After than I would say the R200 per month we put away for our son since he was two years old. It is over R100 000 today.

 

Q: Do you use any specific software or apps to do your own personal budget, and if so, what would you recommend, for desktop or mobile?
We use a Microsoft excel spreadsheet. My husband updates that each month. But we also use the M8 app when we want to track day-to-day spending.

 

Q: What is the biggest myth about money?
That your money problems will go away if you earned more. The reality is that when we earn more, we just spend more and have more debt.

 

Q: What is the most valuable piece of financial advice you ever received?
Working for a stock broking firm through two market crashes in 1998 and 2000 taught me not to be afraid of the markets. I don’t panic when markets fall, I know the power of investing in shares to grow wealth.

 

Q: If money was no object, what would you spend it on?
Travel, travel, travel!

 

Q: What advice would you give to young South Africans who dream of starting their own businesses?
Get informed, learn as much as you can especially about running a business. Many business fail because the owners don’t understand basic business principles.

 

Q: Why do you think South Africans, in general, are so bad at saving?
I think the easy availability of credit is a major problem. Rather than spending 10 months saving for a household item, we borrow the money and spend two years, and double the amount, paying it back. It leaves no money for saving.

 

Q: What was the single biggest and most daunting change you have ever made in your life?
Making the move from the financial industry into journalism. I had never been a journalist and had to learn on the ground. My editor once said, “I don’t know what this is, but it’s not journalism!” I must add that writing this book was probably the most daunting experience in my career!

 

Q: How much cash do you typically carry around with you for everyday purchases, or do you prefer using plastic?
Very little, I mostly use plastic. But when we were in financial difficulty we only used cash in envelopes for specific items.

 

Q: How good are you at bargaining, and what was your best bargain purchase, here or overseas?
I am the worst! I feel sorry for people. But I did buy a gorgeous, black dress at Chic-Mamas, a ‘barely used’ second hand clothes store, for R150, which I wear all the time.

 

Q: What would you say was your biggest financial mistake, the one that taught you most about the power of money?
Our second home. We sold our small, manageable home in Greenside for a huge fixer upper. It just gobbled money, especially running costs. Now we have a smaller home with very low running costs.

 

Q: What is the money question you get asked most often by readers?
How to get out of debt! Then mostly where they can start saving.

 

Q: What do you know now about money, that you wish you’d known 20 years ago?
Not to worry about money so much. There were times when I put my fear of not having money ahead of more important priorities.

 

Q: What is more valuable to you than money?
Most things, really. My family being happy – that is very valuable. Money in itself is not valuable, it is what you do with it.

 

Q: What does it take for you to change your mind?
I have key people in my life that I ask for advice. Their input could make me change my mind if I was set on something. We need others to reflect our situations back to us.

 

Q: Where do you go when you feel like a change of scenery?
If I have a lot of work to do and need a boost, I find moving office helps – to the local coffee shop usually where I also have my coffee and a biscuit.

*Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on mayaonmoney.co.za. Maya on Money, Implement Your Money Plan, is published by NB Publishers.

** This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes. The opinions expressed in this article are the writer’s own and don’t necessarily reflect the views of BrightRock.

Six keys to building your dream home

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Thinking of building a home to call your own? Here’s how to make sure it’s a home sweet home.

By Maya Fisher-French

 

As I was about to move into our newly built dream home, someone asked me if I would do it again. My first reaction was “never!” But then I thought about how much I had learned, and how much easier it would be the second time round. So here are some valuable lessons I’d like to share.

Understand the details of your building bond 

Money is everything when you are building. Without money, everything grinds to a halt. Dealing with the bank was the most stressful part of the build because building bonds are not like ordinary mortgage bonds – they have a whole set of criteria which are not always logical. Building bonds are really geared for full turn-key building projects by a single large building company and do not cater for a builder with sub-contractors.

If you want to work with a smaller builder this is what you need to know:

You only get paid once the bricks are in the ground 

The bank pays out usually in six stages and only for completed works. This means that you or your builder will have to carry the costs of each stage of the build and be reimbursed by the bank. Builders will do this but add around 10% to 15% to the costs of building to fund this cash-flow. You also need ready cash when it comes to buying windows, tiles and bathroom fittings as the suppliers want to be paid on delivery while the bank will only pay once it is installed. My suggestion is that you have a large slush fund that you use to pay upfront for certain items – especially if they give a cash discount. For example, I walked into a bathroom shop and saw exactly the bath I wanted; it turned out to be the last one in stock and selling at a 30% discount. You want to have ready money to take advantage of those specials.

Your bank pays the builder 

In our case the bank refunded us but that is fairly unusual and in most cases the bank wants to pay the builder directly. This makes it difficult if you have forked out for certain finishings and you, not the builder, need to be reimbursed.

You put your money in first

If the cost of the build is R3 million and the bank is only prepared to lend you R2.5 million, you cannot spread this out over the period of the build. You will have to put in the first R500 000. That means that the bank will only start to pay out once you have spent R500 000 on the building.

Find a project manager with good interpersonal skills 

It took us six months to find the right project manager. The one we chose in the end impressed us with his references and the amount of detail in his quote (four pages of an excel spreadsheet in a 9 font). His strong interpersonal skills have been as important as his attention to detail. You are going through what will be one of the most stressful experiences of your life and the person who is holding your dreams in their hands has to exude a sense of control and calm. You will encounter problems and there will be unforeseen expenses, so you need a project manager who can take these in stride while reassuring you. Our project manager’s ability to bring a sense of calm also turned out to be a very valuable skill when dealing with difficult neighbours, as emotions run high during a build.

Work with an engineer from the beginning

Our biggest mistake was not having an engineer as part of the project from day one – especially as we built on an extreme slope. Our architect delivered a magnificent plan – our living space still takes my breath away – but that plan cost us far more than expected in engineering. We knew engineering and waterproofing costs where always going to be a big factor due to the location, but engineers like to cover their backs so they have a tendency to double up on all specifications. While it is reassuring that we should survive a 10 Richter scale earthquake, we have sunk a lot of money into the ground and have not much to show for it – well, apart from a breathtaking view. Inevitably, the project went over budget. There are many finishes that will have to be done in phase three, four or five, and some ideas I had to give up on altogether. But as I stand in my home and imagine living here with my family, I am filled with an overwhelming sense of joy.  This will truly be our home. Every detail has been designed to meet our needs. It is a home which works around our family – and that is priceless.

 

Maya Fischer-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

 

* This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes. The opinions expressed in this article are the writer’s own and don’t necessarily reflect the views of BrightRock.

The cappuccino crunch

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Do you really, really need that daily cappuccino? Of course you do. But putting it on hold and taking a fresh look at your little indulgences could save you a small fortune every year, advises Maya Fisher-French, in this extract from her new book, Maya on Money.

A couple of years ago I wrote an article about how much you could save in a year if you invested what you spent on a daily cappuccino. The amount is quite extraordinary – over R6 500.

I was pointing out that when people say they “don’t have money to save” they are not looking at those daily unnecessary expenses that add up to a great deal over time.

Finding that extra money

The only way to get your grocery and entertainment budget under control is to write down everything you spend for a month or two. You will quickly find where you are overspending. In fact, just writing it down will make you think twice about what you are spending.

After conducting the experiment myself, I discovered one of those unconscious spending habits: during the summer months, in the intense Cape heat, I had started a habit of taking my sons for a smoothie a few times a week after school. This new habit was costing me R500 per month. This is R500 that was not budgeted for.

I should mention that even after being really careful with our groceries recently – looking out for specials and finding creative ways to cook for less – the reality was that our grocery bill had risen by 80 percent over the last four years.

We can find more ways to cut back, but ultimately some of the money we spend on luxuries will have to move into the grocery money pot – it’s simply getting a lot more expensive to buy the basics that you need for day-to-day living.

Review those monthly bills

Our fixed monthly expenses always surprise me – I cannot wrap my head around the amount of money that goes out of our account at the beginning of each month before we have even bought a loaf of bread. Those monthly expenses need to be reviewed regularly as there are usually savings to be found.

Check your bank fees – saving: R1 680

A friend of mine complained that she was spending around R220 a month on bank fees. Just by speaking to her bank and changing to a more appropriate account she saved R1 680 in bank fees in one year. It is worth noting that several banks offer reduced bank fees if you keep a specific minimum balance in your account.

Call your insurer – saving: R2 400

Car and household insurance have become a lot more competitive and you may still be paying old rates. You don’t usually have to move insurers as your insurer would be loath to lose you if you are a good customer. Experience shows they are often willing to match a quote you received from one of their competitors. By renegotiating with our insurer on both our car and household insurance, we saved around R2 400 in one year.

Bank your change – R2 000

My husband linked his transactional account to the FNB “Bank Your Change” savings account. Every time he uses his FNB card, the purchase is rounded up to the closest R5. For example if he spends R63 then R65 is deducted from his account and the R2 is added to his Bank Your Change account.

By the end of the year he has around R2 000 which we use to pay for all those extras over the festive season.

If you don’t bank with FNB, keep a jar in your kitchen where you put all your loose change at the end of the day. At the end of the year take it to your local school’s tuck shop or even your corner café. They will be only too happy to take your coins in exchange for notes.

Benefit from being loyal – saving: R2 000

It is never a good idea to pay extra to join a loyalty programme but if the loyalty programme comes at no cost, it can be worth a fair amount. Friends of mine used their Pick n Pay Smart Shopper rewards to pay for their entire family Christmas dinner and all Christmas gifts were bought using rewards from their bank.

Be aware however that the benefits of the loyalty reward programme can be built into the price of the goods so don’t let the lure of rewards make you over-pay for goods – you should still shop around.

Another hidden cost of loyalty reward programmes is access to your personal information and direct marketing – set up a separate email address for your reward programmes so that your personal inbox is not filled with marketing bumph.

Smooth your electricity costs 

This is not so much saving as averaging out your electricity costs over the year so that you are not hit with those winter bills. If you have a pre-paid meter, buy the same amount of electricity throughout the year.

In summer, ‘accumulate’ electricity and in winter dip into ‘the reserves’. Even if you have an electricity account, you can pay in extra during the summer months to pre-fund your winter bill.

A relatively quick way to cut your electricity costs is to install a timer on your geyser. After spending around R1 500 to have a timer installed our electricity bill fell by around 30% – the timer was paid off in a couple of months.

Set up a debit order

When my son was about two years old,  I started a R200 a-month debit order into a fund that tracked the average return of the stock market.

We recently increased the amount to R300 per month but today, 12 years later and after one of the biggest market crashes in history, the investment is worth over R90 000. Not bad for the cost of a dinner once a month!

Put your Money on Maya

Here’s another handy money tip: invest in a copy of Maya on Money: Implement Your Money Plan, published by NB Publishers. 

It’s a highly accessible and informative guide to making your money work harder and smarter for you. Maya is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on her website, mayaonmoney.co.za.

Maya Fischer-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

 

* *This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes. The opinions expressed in this article are the writer’s own and don’t necessarily reflect the views of BrightRock.

 

How Does Maya Manage Her Money?

How Does Maya Manage Her Money?We chat to the popular financial columnist and author whose sound advice on saving and spending money can help turn your small change into a small fortune

Imagine a world without money. For some among us, especially as the month draws towards its end, that probably doesn’t require too much imagination.
But money, whether it’s in plentiful supply or in the throes of a drought, is the force that makes the world go round, which is why it is so vital to our everyday living as well as our long-term plans.
So imagine, instead, a world with enough money to satisfy your needs and make your dreams come true. Then start working towards it, using common sense, discipline, and the accumulative power of change.
This is where Maya Fisher-French comes in. With a solid background in trading and investment, Maya has become one of South Africa’s most trusted and easy-to-understand advisors, and her new book, Maya on Money, Your Money Questions Answered, is a common-sense guide to conquering your financial fears and making the most of your money.
We caught up with Maya and asked her what money means in her own world, and what she has learned from her own money mistakes.

Q: What is your earliest childhood memory of the meaning of money?
For me growing up money felt like a power play in our home. I think for many families money continues to be about power. It is one of the reasons I feel so strongly about women remaining financially independent.
Q: Were you a good saver as a child, and if so, what was your most ambitious savings goal?
When I was 15 my father gave me a Bob-T card in which he had put six months’ worth of an “allowance”. It was the most liberating feeling ever!
I went straight out and bought a jersey I really wanted, and then realised I had blown at least two months allowance on it. I then asked my parents to please give me my allowance in monthly instalments.
Q: What do you love most about change?
The opportunity it creates – when one door closes another always opens, and you suddenly realise this was all meant to be.
Q: What’s the best investment you ever made?
In monetary terms it was buying our first home in 1997. Interest rates were at their all-time high, and we struggled to meet the mortgage payments. But then interest rates plummeted and property prices re-rated completely. Our property value quadrupled.
After than I would say the R200 per month we put away for our son since he was two years old. It is over R100,000 today.
Q: Do you use any specific software or apps to do your own personal budget, and if so, what would you recommend, for desktop or mobile?
We use a Microsoft excel spreadsheet. My husband updates that each month. But we also use the M8 app when we want to track day-to-day spending.
Q: What is the biggest myth about money?
That your money problems will go away if you earned more. The reality is that when we earn more, we just spend more and have more debt.
Q: What is the most valuable piece of financial advice you ever received?
Working for a stock broking firm through two market crashes in 1998 and 2000 taught me not to be afraid of the markets. I don’t panic when markets fall, I know the power of investing in shares to grow wealth.
Q: If money was no object, what would you spend it on?
Travel, travel, travel!
Q: What advice would you give to young South Africans who dream of starting their own businesses?
Get informed, learn as much as you can especially about running a business. Many business fail because the owners don’t understand basic business principles.
Q: Why do you think South Africans, in general, are so bad at saving?
I think the easy availability of credit is a major problem. Rather than spending 10 months saving for a household item, we borrow the money and spend two years, and double the amount, paying it back. It leaves no money for saving.
Q: What was the single biggest and most daunting change you have ever made in your life?
Making the move from the financial industry into journalism. I had never been a journalist and had to learn on the ground. My editor once said, “I don’t know what this is, but it’s not journalism”!
I must add that writing this book was probably the most daunting experience in my career!
Q: How much cash do you typically carry around with you for everyday purchases, or do you prefer using plastic?
Very little, I mostly use plastic. But when we were in financial difficulty we only used cash in envelopes for specific items.
Q: How good are you at bargaining, and what was your best bargain purchase, here or overseas?
I am the worst! I feel sorry for people. But I did buy a gorgeous, black dress at Chic-Mamas, a ‘barely used’ second hand clothes store, for R150, which I wear all the time,
Q: What would you say was your biggest financial mistake, the one that taught you most about the power of money?
Our second home. We sold our small, manageable home in Greenside for a huge fixer upper. It just gobbled money, especially running costs. Now we have a smaller home with very low running costs
Q: What is the money question you get asked most often by readers?
How to get out of debt! Then mostly where they can start saving.
Q: What do you know now about money, that you wish you’d known 20 years ago?
Not to worry about money so much. There were times when I put my fear of not having money ahead of more important priorities.
Q: What is more valuable to you than money?
Most things, really. My family being happy – that is very valuable. Money in itself is not valuable, it is what you do with it.
Q: What does it take for you to change your mind?
I have key people in my life that I ask for advice. Their input could make me change my mind if I was set on something. We need others to reflect our situations back to us.
Q: Where do you go when you feel like a change of scenery?
If I have a lot of work to do and need a boost, I find moving office helps – to the local coffee shop usually where I also have my coffee and a biscuit.
*Maya Fisher-French is an award-winning financial journalist with a flair for cutting complex money matters to their core. Find out more on  mayaonmoney.co.za. Maya on Money, Your Money Questions Answered, is published by NB Publishers.

How to Raise a Money-Savvy Child

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Of all the values you can teach your children, by lesson or example, the values of saving, budgeting, and investing may be the ones that pay the greatest dividends. By Maya Fisher-French

How to Raise a Money-Savvy Child

Whenever I meet people whose finances are in good order, they invariably tell me it was due to the lessons their parents taught them.

As young children they were warned against taking on debt and taught about the virtues of saving.

They worked for their pocket money and their parents taught them about budgeting and saving towards a goal, rather than just handing out cash on a whim.

So how can you, as a parent, go about creating a financially savvy kid?

I know from personal experience of having two very different children that everybody is born with a money personality.

For some children, saving comes naturally. They don’t really have anything they want to spend their money on and they like the idea of seeing their money grow. For other children, money burns a hole in their pocket and they are not happy until every last cent is spent.

But with the right encouragement, you can change their behaviour and attitude towards money. My first born is a natural saver. He is quite happy to hoard all his pocket money, splashing out occasionally on books.

My second born however, is a completely different child – money has no value at all unless it is turned into something tangible. This didn’t stop him from becoming absolutely distraught because his brother’s money box was so full while his was always empty.

As a parent, especially one who writes about money, I was really worried about what would happen to him once he grew up and discovered credit cards!

However through teaching him about money and the value of goods as well as getting him to set goals, he has saved over R1,000 in his bank account. It may take more encouragement for some children than for others, but if you put a plan in place, your child can learn some very valuable financial lessons.

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Turn pocket money into rainy-day money

Saving money in a piggy bank is a tangible way to teach children about money and the actual value of the coins and notes. There does, however, come a time when a bank account is more appropriate.

A money box never encouraged my son to save. Being able to see the money burnt a hole in his pocket and he was just desperate to spend whatever was in it.

When he was about 8 years old I opened a bank account for him and his behaviour shifted immediately. It was a matter of “out of sight, out of mind” and he started to want to grow the money.

By adding in birthday money and saving his pocket money, he was able to save towards things he really wanted rather than wasting the money on sweets and cheap plastic toys.

A bank account also teaches children about banking. You can even turn it into a family project – help your child to research the various bank accounts and to understand the most cost-efficient way to bank.

Invest in tomorrow

We took the bank account a step further by linking a savings account where we transfer any birthday money.

In order to spend it he first has to transfer the money to his transactional account so this further encourages saving.

For older children who may have longerterm goals, opening an investment account that is linked to the stock market can be an excellent way to teach them about long-term investing.

If for example your teenager has a holiday job or a weekly part-time job, encourage them to put R200 to R300 away each month into a unit trust.

Even if your 16-year-old saves just R200 a month into a unit trust and it grows at 12% a year, it could be worth as much at R17 000 by the time they turn 21.

Learn the value of working for money

It is important to give children money they can spend themselves so they understand the relative value of money.

Most families do this through pocket money which can be linked to chores in the home.

By relating money to a chore, they learn that money is worth something and doesn’t just grow on trees. It’s also a great way to get the dog walked and fed!

Be a wise and savvy shopper

Take your children grocery shopping with you and teach them how to calculate relative pricing – let them work out which brand of tinned tomatoes or packet of toilet paper is offering the best value.

My ten-year-old son has become extremely proficient at online shopping and finding stores that are offering sales. He has learnt to do price comparisons before spending and the idea of “shopping around” also means he doesn’t buy the first toy he sees – often by the time he has shopped around his interest in the toy has diminished.

Invest in tomorrow

Goal-setting is without doubt one the best ways to teach savings. It is very difficult to explain to a young child that they must “save for the future” but if they have a specific goal in mind, help them to research and work out how much it will cost, and then encourage them to save for it.

This was how I shifted my son’s mindset from spending to saving. Once he had a goal (an electric car set) he became obsessed about saving his pocket money and trying to find ways to earn more cash.

Learn to balance the budget

The teenage years are a wonderful time for children to learn how to work with a budget.

Sit with your teenager and calculate how much they need each month for their toiletries, clothing, airtime and entertainment, then give them a monthly stipend which they must use for their dayto-day spending.

In the first month they may blow it all on airtime but within a few months they will have learnt to make the money last – as long as you stand your ground and don’t give them extra cash!

Children learn best from example. You can’t teach your children to budget if you are not doing a household budget.

Discuss the household budget with your children and if appropriate, allow them to give ideas as to how to allocate that budget.

Holidays are a great opportunity to involve children in budgeting by providing a set amount that the family can spend over the holiday and then researching activities or ways they would like to spend it.

 

About Maya

Maya Fisher-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

7 Baby Steps to Financial Freedom

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As your life changes, so do your needs, your wants, and your finances. How can you make sure you stay on the right path? Take it one “baby step” at a time, advises Maya Fisher-French

After writing my review on the South African version of Dave Ramsey’s Total Money Makeover, I received an email from a reader, James, shared his experience of getting his finances in order after reading the US edition.

James’s experience of travelling the road to financial health shows not only that it is possible, but also how any plan needs to be adapted to your own circumstances.

Total Money Makeover provides seven “baby steps” on your road to financial freedom. The idea is that by breaking it down into small steps, you achieve small victories, and this gives you motivation to tackle the next challenge.

01 – Save the first R10 000 of your emergency fund fast

“I recently had a car accident and I was able to pay for the excess and car hire from my emergency funds. I now need to replenish the emergency fund out of my salary over the next two months,” says James.

Comment // Life happens, and those smaller emergencies like a car accident or broken geyser are fairly frequent events so having a startup emergency fund of R10 000 prevents you from having to take on debt just when you are starting your journey to financial freedom.

02 – Get rid of debt

“My wife and I haven’t had consumer debt for close on around 10 years now. The only debt we have is our access bond,” says James.

Comment // This is a great start to any financial plan. Not having debts to repay each month gives you the extra money to start building wealth and becoming financially free.

03 – Finish the emergency fund off to 3 to6 months of expenses

“I currently keep my emergency funds in my access bond. I can withdraw the 3 to 6 months amount from my access bond and place it in a separate money market account as per the book, but my money is just as accessible in the bond, although the risk is that the bank closes the access facility,” says James.

Comment // The decision to keep your emergency funds in your access bond is a personal one, but it is often better to have separate goals. For some people it may be better to have emergency funds in a separate account so you know exactly where you are in terms of paying off your home loan.

4 – Maximise your tax-free retirement saving

“I currently contribute 10% of our gross income to retirement funding. To push this up to 15% will be a challenge. My wife has substantial pension fund in a preservation fund, which helps,” says James.

Comment // Your wife started young and preserved her retirement funds, which will make a significant difference to the value of your retirement funds. Now would be a good time to sit with a financial adviser and assess your current retirement provision.

Make sure you are not over-committing to paying off your home loan at the risk of underfunding your retirement – remember you can’t eat your house. You also want to maximise the tax-free savings for retirement.

5 – Save for your child’s education

“I have three children and save R200 per child in the Fundisa fund. It used to be R600 per child, but I lowered the amount to redirect funds to retirement savings. I need to increase this to at least R650 per child per month, since my children are my priority. I will continue with R200 per month into Fundisa to allow me to take advantage of the government subsidy and put a further R450 per child into a unit trust.”

Comment // As you say, your children are your priority. Many parents will complain about school fees but drive around in cars with R5 000 a month repayments! It is a great strategy to take advantage of the Fundisa subsidy and invest in a high-growth unit trust. Children’s education is very important but so is your retirement.

6 – Pay off your mortgage

“Even if I withdraw emergency funds from my bond, we will still be ahead of the curve in terms of capital repayment. We are now almost five years into bond term, and have paid off almost 75% of the initial capital amount. However we are busy with alterations to make space for our growing family – so have used the access facility. Outstanding bond will grow to about 40% of initial bond amount,” says James.

Comment // You have used the opportunity before having children to pay off a significant portion of your mortgage. It may be more difficult now that you have children, with school fees and other expenses. Find a balance between paying your home off and saving for your children’s education.

7 – Build wealth like crazy

“We are not there yet!” says James.

Comment // By the time you reach this stage you will have no debts, savings for your children and a fully paid house and car. You are able to invest a significant amount of your salary into high-growth investments.

For example, if as a household you earn R20 000 a month, without debt you could easily save half of that. In ten years’ time that would be worth R1.5-million in today’s value.

The opposite of that is if you had R1.5 million of debt, you would be paying out more than R10 000 in interest repayments alone, without even starting to pay back the capital!

 

Maya Fisher-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

Set Yourself Free!

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Can you manage your finances well enough to live without any debt at all? Yes, says Maya Fisher-French. Here’s how…

I was recently asked by a magazine if it is possible for a family today to live debt-free. My reply was “absolutely”. I believe that because of the proliferation of credit cards and easy access to credit,
we have forgotten how to live without debt.

If I think back to my parents’ generation, for most of them the only short-term debt they had was an account with the local grocer which they settled every month.

Access to credit has allowed us to live well beyond our means. We live with the belief that we can have whatever we want today and will simply pay for it tomorrow.

Unfortunately tomorrow has finally arrived which is why we are seeing households struggling under the highest debt levels in history.

While living debt-free is easy to say and much harder to do, I have walked the tough path from struggling to meet my debt payments to finally being debt-free apart from my home loan.

I share my story as it demonstrates that life can be tough and you have to face your situation head on.

About seven years ago both my husband and I lost our jobs within a couple of months of each other and we had just had our second child and had bought a new house.

My husband was fortunate enough to find a new job within a few months but I started my own freelance business which took a while to generate a sufficient income.

Before we knew it, we had amassed a sizeable debt on our credit cards and overdraft facilities. One day we sat down and decided enough was enough and we put a plan into action that involved budgeting, spending with cash, cutting out credit and negotiating with our creditors.

Begin with a budget

We learnt quickly that one cannot even begin to try and get out of debt without having a budget. It is the cornerstone of any financially healthy household.

We started a monthly budget using Microsoft Money and still today we do our budget at the beginning of every month so we have a clear idea of what our expenses will be.

There are always luxury items that we can cut back on if we see that it is going to be a tough month. It also helps us to prioritise our spending. If we know we have to service the car one month we postpone fixing up something in the house.

I have noticed over the years that if we do not do our budget one month, we always land up overspending. Knowing what we have in the bank and what we can spend keeps us on track.

Use the envelope system

Once we had worked out our budget we would physically draw the money to pay for our day-to-day expenses. We had separate envelopes of cash for food, petrol, entertainment, clothes etc.

The discipline was that once that envelope was empty there was no more money. It made us think about every purchase and there were several months were we ate baked beans for a few days
before month end.

It also taught us how to plan better and spread our money over the month. We did that until we were comfortably living within our means and we were out of debt.

Cut back on credit

We realised that one of the reasons we had so easily fallen into debt was due to our overdraft facility. We would just spend and the card would be accepted at the shops. We were never informed as to when it was “our” cash or the bank’s money we were using.

So we closed down our credit facility on our current accounts. If we go into debt again, I want to know exactly when and by how much. One of the problems in paying down debt over time is that you still have to keep the overdraft facility until it is paid off.

In our case we settled the debt by drawing down on our mortgage and increased our monthly mortgage payments, which allowed us to immediately cancel the overdraft. But one can also ask the bank to ratchet down the facility as you pay it off so that there is no credit available.

Negotiate, negotiate, negotiate!

We had quite a few medical bills that we just couldn’t pay. We contacted the service providers and asked them if we could pay it off over six months.

It wasn’t an easy thing to do because you have to swallow your pride, but we were amazed at how accommodating people can be. In every single situation they agreed. The fact that we had contacted them before they had to spend money on debt collection gave us credibility.

What I learnt was that ultimately, deciding to get your finances in order is a state of mind. Strangely enough there is a perverse enjoyment in going without in order to get financially healthy.

We loved those nights opening the last can in the cupboard because we knew we were in control and getting out of debt.

I think as humans we derive more pleasure from some form of discipline and a set of rules to guide us, than we do from just living for today.

* Maya Fisher-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

** This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

Keep the Change!

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Interest rates have gone up, the price of petrol has soared, and the cost of living is skyrocketing. Maybe it’s time to take a good look at your expenses, and how to keep them in check. Try these tips for starters… by Maya Fisher-French

When it comes to cutting expenses, there are small changes you can make in your spending behaviour that can add up to big savings.

While some expenses may seem minimal, you would be surprised at how much money you could save over just a few months, by putting these frugal tips into practise.

Avoid a shocking electricity bill

Save R480 a year by installing an energy-efficient shower head which uses 40% less hot water. To test your shower head, hold a bucket under the shower head for 12 seconds.

Measure the amount of water in the bucket with a measuring jug. If you have collected more than two litres of water, your showerhead is inefficient.

Cut 5% off your electricity bill by maintaining your geyser temperature at 60°C. First, switch off the electricity circuit at the mains. Then, undo the cover over the electrical element of the geyser and turn down the thermostat using a screw driver.

Save R500 a year by insulating your geyser with a geyser blanket as well as the water pipes leading from the geyser for the first three metres.

Reduce the electricity used by your appliances by 20% by turning off your appliances at the plug. Appliances such as televisions and DVD players, which remain on “standby” when not in use, draw about 20 per cent more electricity than if they were turned off properly.

Cut a further 10% off your total electricity bill by reducing your pool pump’s operating hours to just six hours a day.

Cut your lighting costs by 75% through installing compact fluorescent lamps (CFLs). Lighting accounts for 17 to 20 per cent of your electricity bill so switch off lights in rooms that are unoccupied.

Eat in at work

Take a packed lunch to work instead of buying your lunch from the canteen or takeaway around the corner. If you pay an average of R25 for lunch three times a week, that quickly adds up to a saving of R300 a month.

Be a cost-conscious shopper Shop smart. Check the unit prices on products instead of just looking for the lowest price. A larger pack will have a higher price, but usually works out cheaper per unit.

For example, you might find it’s cheaper to buy a 1kg tub of margarine in one shopping trip rather than two 500g blocks of margarine over two shopping trips.

If you’re contemplating a purchase that is not an absolutely necessary item, give yourself a week to think about whether you really need it before you hand over your hard-earned money.

Check your Bank Charges

Watch your ATM fees. Use your own bank ATMs wherever possible and avoid making several withdrawals over a short space of time.

Rather, work out how much cash you need and then make one withdrawal. Do some research into the various account options that different banks offer to see if you could make a substantial savings by moving banks or changing over to a different charging option.

Watch your TV budget

Cancel or downgrade your satellite television subscription. Do you really need more than 300 TV channels? How many channels do you actually watch and how often do you watch TV?

Consider spending more quality time together as a family or downgrading your satellite package to a more affordable option.

For example, if you downgrade from the DStv Premium package (R625 a month) to DStv Compact (R275 a month), you will save R350 a month or R4 200 a year.

Make the right call

Save on your phone bills. With Telkom’s 19:00 to 07:00 Callmore time, Blackberry’s BBM service and Whatsapp, you have little excuses for high phone bills. Make calls only when you have to.

Drive costs down

Check your car insurance premium annually.

Your insurance should be adjusted each year to account for the fact that your car depreciates in value. Not all insurers make this adjustment automatically. You snooze, you lose!

With the price of petrol at an all-time high, consider forming lift clubs for school and getting to work, but inform your insurance company first.

Save your health

If you are on chronic medication, shop around for the best price. Although we have a single exit price for medicines in South Africa, the dispensing fee differs between pharmacies and this can add up to a hefty annual saving.

Check which pharmacies are approved by your medical aid scheme and also look out for national chain pharmacies that can offer you lower prices.

Teach your children well

Instead of shelling out for new uniforms constantly, check out the school secondhand shop. You will pick up good-quality clothing that is priced reasonably and is only likely to be used for one year or even just one or two terms, depending on your child’s growth rate.

* Maya Fisher-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in Economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

 

** This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

Consumer, Protect Yourself

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It pays to complain about faulty goods and broken promises, now that your rights are safeguarded by the Consumer Protection Act. Here’s what you need to know, by Maya Fisher French.

We’ve all had a bad customer experience, but how many of us actually take it further? Under the Consumer Protection Act (CPA), you may be entitled to compensation. Consumer Goods and Services Ombud (CGSO), Adv. Neville Melville, points out five common areas of consumer complaints and how to go about complaining.

01 Problem: Poor quality

Consumers may find that goods they purchased are of poor quality or downright defective.

“Under the Consumer Protection Act (CPA), consumers are entitled to ask for the goods to be repaired, replaced or refunded if they are defective,” says Melville. “The choice is the consumer’s – the retailer cannot force the consumer to have the goods repaired if they want a refund or replacement.”

He adds that the consumer can also insist on a cash refund instead of a store credit, but they must return the goods within six months of purchase.

When buying online, be sure to read the small print. However, whatever the supplier’s return policy, if the goods are defective, the consumer is entitled to have them replaced, returned or refunded. And the supplier must cover the expenses of this.

Make sure you keep your paperwork in order, including your receipts if possible to make the process easier.

02 Problem: The shop won’t let me return my purchase

Loved that handbag yesterday, but changed your mind today? That may not be enough to lodge a complaint against a retailer.

“It’s a misnomer to think that a company must take back goods you purchased if there’s nothing wrong with them,” says Melville.

“The Act only requires a supplier to accept a return if there was something wrong with the goods.”

However, a ‘cooling-off period’ of five days applies to direct marketing sales or to credit transactions, such as purchasing a car, where there is a written agreement in place. Purchasing goods using your credit card counts as a cash sale.

“If there is nothing wrong with the goods, the retailer can also insist on a till slip as proof of purchase or for the original packaging in order to accept a return,” says Melville. “Most reputable retailers have a returns policy in place, which may specify a time limit for returns, usually up to about a month.”

03 Problem: Caught in a marketer’s trap

Companies use marketing tactics such as sales and promotions to get customers through the door. But if you arrive, only to be told they’ve run out of the advertised stock, you may have grounds for a complaint.

Under the CPA, retailers must ensure that they have sufficient stock to meet reasonably anticipated demand for any products that are promoted or advertised.

“If a company advertises goods at a specific price and runs out of stock, they can be held liable for ‘baiting’ consumers,” says Melville. “If the consumer can show this, they have grounds for complaint or can demand goods of a comparable quality and value.”

04 Problem: Contaminated foodstuff

If you have suffered from food poisoning after eating contaminated food, then you may be entitled to claim compensation under the CPA.

“You may be able to claim expenses such as those related to hospitalisation, other medical costs, and loss of income while you are ill,” says Melville.

However, a doctor’s note saying you’ve had an upset stomach is unlikely to get you far. “Again keep your till slip and collect as much evidence as possible, including laboratory tested specimens and if possible, freeze any left food so it can be tested for bacteria,” says Melville.

05 Problem: Late delivery

You paid upfront for that lounge suite, but it still hasn’t been delivered months later? Consumers are entitled to receive their goods within a reasonable timeframe.

If you’re buying groceries online, this may mean within a day, while purchasing furniture may require a longer lead time of up to about six weeks.

“If your bank account is being debited for goods you have not yet received, don’t simply stop paying as this could have a negative impact on your credit rating, but rather lodge a complaint first,” says Melville.

Melville explains that most complaints that come through to the CGSO are the result of poor complaints-resolution by companies. This includes consumers not being able to contact the company; being kept waiting for an unreasonable period of time for an answer; rude or unhelpful customer service staff; and being given conflicting advice on the status of the complaint.

“If handled correctly at store-level, there would be far fewer formal complaints,” he adds. “Companies should really focus on the complaints as much as the sales.”

Melville concludes: “Great companies should view complaints not as a nuisance, but as an opportunity to put things right.” If you need help resolving a consumer complaint, visit www.cgso.org.za;
call 0860 000 272 (CPA); or email info@cgso.org.za.

* Maya Fisher-French is an award-winning independent financial journalist. Her accessible and practical advice on personal finance and investment issues has appeared in several leading South African publications, including the Mail & Guardian, Maverick and BestLife. She currently edits the “My Money, My Lifestyle” section for City Press. Maya holds a BA Honours degree in  economics, and she worked in stockbroking and private banking before embarking on her journalistic career.

** This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

4 Steps to Financial Fitness

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Give your money-muscles a workout with this easy-tofollow programme from our personal finance expert, Maya Fisher-French

South Africans are not very good when it comes to money management. In March this year, the total outstanding consumer credit balance for South Africans was a staggering R1.45 trillion, according to the National Credit Regulator.

There is no time like the present to pull up your socks, tighten your belt, and rein in that spending urge.

01 Track your spending

Get into the habit of recording every cent you  spend and you will soon form a clear picture of where your money is going.

This exercise can take as little five minutes a day and there are extremely good apps available for laptops, tablets and smartphones which will help categorise your spending and identify trouble spots.

These apps can also help you set up a household budget which is critical if you want to be in control of your finances.

Common spending drains include those quick visits to your local coffee shop, bottled water and bought lunches.

Cutting back in your trouble areas will free up money for savings.

02 Don’t pay off shortterm debt with longterm savings

More than half of South Africa’s pensioners are not making ends meet. There are a number of reasons for this, but one of the biggest factors is the depletion of retirement money during working years.

When you change jobs, you have two options: to reinvest the money you accumulated during your years at the previous job or to disinvest the lump sum and take your cash out.

Unfortunately, the money that is cashed out is seldom, if ever, reinvested. The reality is that it is impossible to ever make up the savings if you start saving again from scratch.

This is because you cannot make up for lost time and the savings lose their compounding momentum (compounding refers to generating earnings from previous earnings).

03 Keep on top of your retirement saving

Keeping regular tabs on whether you are on track to maintain your current lifestyle after you stop working is a very smart move.

Most South Africans won’t save enough for their retirement, but there is no reason you should join this statistic.

See if you are on track to retire comfortably with thissimple calculation:

  • After working for five years, you need to have saved 1 x your annual salary
  • After 10 years, 2 x annual salary
  • After 15 years, 3 x annual salary
  • After 20 years, 4 x annual salary
  • After 25 years, 6 x annual salary
  • After 30 years, 7 x annual salary
  • After 35 years, 10 x annual salary
  • After 40 years, 12 x annual salary

04 Save any bonuses or salary increases

Whenever you receive ‘ad hoc’ money such as a bonus, tax refund or salary increase, keep it separate from your day-to-day expenses and save as much of it as you can.

Settling debt is also a smart move to make with this money, but once this is done, anything left over should be used to boost your savings.

Ask your retirement fund and RA provider for the current value of your retirement savings, work out your annual salary and how many years you’ve been working for and you’ll soon see if you are on track.

If you are not, consult a professional financial advisor to make a plan to increase your savings.

This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.

 

 

Kids Cost a Fortune!

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A good education is the best investment you can make, which is why it’s all the more important to make sure you’re saving enough to give your children the future they deserve. By Maya Fisher-French

If your child started Grade 1 at a public school this year, you can expect to pay around R450 000 for their 12 years of schooling. A private school could cost around R1.5 million, once uniforms,
learning materials and extramural activities have been added.

A three-year degree at university will cost around R350 000 in fees alone, excluding travelling, accommodation and allowances. If your child is born today, you’ll need to save R1 500 each month for public schooling and a three-year degree, if you increase your premium with education inflation; and R3 200 each month if you keep your premium level.

To pay for private schooling and a three-year degree you’ll need to start saving R3 800 per month – that’s if you increase your premium to keep pace with education inflation, which is around 10% a year. But if you opt to fix your premiums, you’ll need to save R8 100 per month. Faced with these, quite frankly, terrifying figures, what are parents expected to do? Something somewhere has to give, and it usually happens in two areas. Firstly, sacrifice retirement savings, and secondly,they take on increasing debt. By having a strategy in place, you can find a way to provide an education for your child without ruining yourself financially:

Watch the debt:

Many parents complain about the cost of education yet drive around in a R5 000 per month luxury vehicle. Your child’s education is far more valuable than a luxury car and education doesn’t  depreciate! When you buy a house, car or take on any debt, do not do it at the expense of your child’s education.

Grow your savings painlessly:

Use the Save More Tomorrow plan to boost education savings. For example if this year you received a 7% salary increase, sign a debit order immediately to put 2% of your additional income into
a savings account. Every year commit to increasing that debit order by a further 2% of your salary.

Within five years you will be saving 10% of your salary without having to cut back on your spending.

Set realistic goals:

It is very difficult to save enough to pay for your child’s secondary or tertiary education in full. Rather target the growing gap between your salary increases and the increase in school fees, in other
words have savings to supplement your school fees.

You also need to save for the jump in school fees when your child moves into high school as the difference in fees between primary and high school can be as much as 20%.

Use the government bonus:

This is a government initiative enabling you to save for a child’s studies towards an accredited qualification at either a public college or university.

You’re paid an annual bonus on the investment which can be 25 per cent of the money you save annually up to a maximum of R600 per child.

If you save R100 a month, you get another R300 a year. To receive the maximum bonus of R600 you have to save R2 400 in total a year. The bonus can only be used by the learner. You can withdraw your own money but will then lose the bonus.

Study loans:

Most students have to consider study loans for tertiary education. Parents can assist by paying off the interest portion each month so that when the child graduates they only have to pay off the capital and not the accumulated interest.

There are also government assisted financial programmes such as The National Student Financial Aid Scheme.

Have a plan:

A good starting point is to enrol your child in a school that you can afford on your current salary. Then as soon as your child starts Grade 1, immediately increase your savings by the difference
between primary and high school fees.

You will then be setting aside a realistic percentage of your salary for your child’s 12 years of education and the savings will supplement the annual fee increases in high school.

For example if Grade 1 costs R1 000 per month but Grade 8 costs R1 500 per month, you need to save R500 a month from the beginning of Grade 1.

Note this would be simply to cover future increases in school fees and not tertiary education.

Start a fund:

Every parent needs to be saving towards their child’s education, unless they plan on inheriting a large fortune. To boost those savings, ask family to add money to their education fund rather than buying birthday or Christmas presents.

Children need an education more than they need toys.

Invest for growth:

If you are saving for five or ten years before you will need the money, ensure that you invest in a fund that will grow faster than the increases in school fees.

Cash-like savings will not be enough as they return around 5% at most compared to school fee increases of around 10%.

Consider investing in a unit trust that has exposure to property and equity (shares). A balanced unit trust would be a good option and several unit trust companies offer investments from R200 to R300 per month.

This article first appeared in The Comet, an online newsletter by BrightRock, provider of the first-ever life insurance that changes as your life changes.