The power of positivity and a good plan

Have you ever told yourself, “When I have more money, I’ll be happier”? How about, “I’ll never be able to pay off this debt”? These sort of toxic money thoughts are holding you back from financial success – and happiness! A good financial plan needs to be attainable and measurable, those expressions are neither.

The first step to a financial plan is both the hardest and the easiest – it’s the starting point. The point where you measure how deep you are so that you can calculate what you need to do to get where you want to be. Measuring your budget is usually a huge relief for most people, your finances are no longer a mystical figure floating in the ether, you have defined an attainable and measurable goal.

You need to rescript your brain into thinking positive and actionable thoughts. Here are some tips to help you along your way:

Get good advice
Getting good advice and being reminded that what we want to achieve IS attainable does wonders for an attitude of success. However, you will also need to keep your end-goal in mind.

A good way to do this is to pick out a positive phrase that acts as a sort of rule-of-thumb. For example, “Is this [potential purchase] better than a family vacation / new car / bigger apartment?”

Don’t Rush
One study showed that the farther away a goal seems, and the less sure we are about when it will happen, the more likely we are to give up. Consistency is key.

Use numbers and dates to measure WHEN you want to achieve your goals by. And work out some smaller, short-term goals along the way that will reap quicker results. Paying off debts or saving a certain amount, for example, can leave you with a great feeling of pride and accomplishment. This increases the likelihood of you keeping up your good financial habits.

Dig in your heels
Not next week. Not when you get a raise. Not next year. Get started today – and don’t let up!

Need some good advice? That’s why I’m here. Let’s get in touch!

South Africans lack confidence when it comes to finances

Most South African consumers feel challenged by their finances, with relatively few saying that they are highly successful at sticking to their financial goals or are knowledgeable about financial matters.

This was revealed when the Financial Planning Institute of Southern Africa (FPI) conducted a nationwide survey, in conjunction with the Financial Planning Standards Board (FPSB) and a global research firm (GfK), to determine South African citizen’s financial attitude compared to that of the average global citizen.

Both primary and shared household financial decision-makers were surveyed, 19,000 participants from 19 countries around the world, the results revealed the following key findings with regards to South Africa:

Consumers have moderate to low confidence when it comes to their finances.
Only 27% feel strongly confident when it comes to their “financial know-how”, or feel highly successful about sticking to their financial strategies. While 38% of the respondents were strongly confident that they will achieve their financial goals. These figures are higher than their respective global averages, but still aren’t promising.

Home ownership and support for loved ones are top financial priorities.
Home ownership and providing financial support for loved ones were the top financial priorities of South Africans. Other predominant priorities included being free of major debt, retiring in their desired lifestyle and managing finances to achieve life goals.

Financial planning services help to get on track financially.
South African consumers stated that the most helpful financial advice services they received were for retirement planning, budgeting, cash flow, debt management and investment planning.

Most consumers think financial planning should be regulated.
While 43% of respondents in South Africa are unsure whether financial planning is regulated (vs. 41% globally), 67% believe it’s important for financial planning to be regulated, compared to 79% globally.

Trustworthiness is the biggest issue when working with financial professionals.
87% of South African respondents believe that trustworthiness is the biggest barrier when it comes to working with a financial planner. Surprisingly, 70% said they don’t know whom to trust when it comes to financial planning even though they saw it as an important consideration.

Working with a CFP® professional helps consumers feel more knowledgeable about financial matters.
In South Africa, 37% of consumers who work with a CFP® professional report feeling strongly confident in their financial know-how. 29% of consumers who work with any financial professional feel this confident and only 25% who don’t work with any financial professional feel this confident.

It is easy to lack confidence when you don’t feel that you have the “financial know-how”. It is also easy to be overconfident. What it comes down to is not only financial knowledge, but understanding - that’s what I’m here for. I will take you through the necessary processes to formulate achievable financial goals and make you feel financially confident again!

Retail Distribution Review – Prepare for advice fees

For the first time in South Africa, financial advice is set to become a billable service. Known as the Retail Distribution Review (RDR), the first phase will be implemented later this year (2016), introducing some significant changes for both consumers and financial advisors alike.

As with all change, some sound preparation and a positive outlook will make for a smoother adjustment. One of the main changes in mindset is to accept that making direct payment for financial advice is fast becoming a reality.

RDR forms part of the Financial Services Board’s (FSB) framework that seeks to ensure fair outcomes to customers and tries to minimise potential conflicts between the interests of customers, product providers and advisors.

It is important for consumers to be aware that charging direct payment will be in place of commission based fees, which many consumers don’t generally think of as payment for advice.

Consumers are likely to face various different methods of charging by advisors. They could be billed at an hourly rate, just as they are billed when they consult a lawyer or a medical professional. Alternatively, they could be charged per consultation session or be billed a fee that is linked as a percentage to the size of the investment, similarly to the way a real estate agent would operate.

Customers pay for an advisor’s time, trust and relationship and quantifying these essential elements is found in every point of contact between myself and you - this is partly why I manage a website and newsletter that are dedicated to staying in touch with you.

We will all need to understand that fees are just a different way of paying for all that myself and my team offers. The FSB believes that the RDR will form a win-win situation for all parties involved.

Another 5 Financial Reflections for 2016

Looking forward to another year of financial success means embracing monetary mistakes of the past. More importantly, you need to be honest with yourself about where you currently are and where you want to be.

Here are another 5 Financial Reflections from 2015, for 2016:

Don’t let yourself be pressured into buying designer goods
Branding is such a huge part of the modern consumer society, yet there are generic products that deliver exactly the same level of quality. Buying high-ticket items might make you feel good about yourself in the short term, but in the long run your frugality makes more sense.

Learn to say you’re broke when you are
There is no shame in admitting this, especially when you consider how many people are living above their financial comfort level on credit. If your friends want to go to an expensive restaurant, don’t be afraid to suggest a bring-and-braai at your place rather; or delay the excursion until you have sufficient cash flow available.

Make the most of what you’ve got
Scavenge your wardrobe, some of the clothes that you haven’t been wearing are probably still in good nick. Check to see what you have before rushing off and buying new stuff. Fix things that are broken, reupholster, add a fresh coat of paint, and if all else fails look for second-hand bargains.

We live in a throw-away culture, avoid ostentatious display and appreciate the small things in life.

Be honest with yourself about wasting money
You can easily lose hundreds of rands on buying coffee every morning, going to convenience stores regularly and not eating the food in your fridge before it goes off. These are avoidable expenses that don’t need to be completely eradicated but can definitely be reduced.

By lowering your costs on daily commutes, meals, conveniences and personal luxuries you could quickly accrue a sizeable emergency fund.

Only use credit for emergencies
First, you need to consider what you define as an emergency. A malfunctioning gearbox, a burst water heater, a sudden visit to the doctor’s office. Once you start buying everyday items, such as groceries, on credit there should be warning lights going off in your head. Don’t think of credit card limits and overdraft limits as your money, it’s the bank's money that you’re using and it’s best not to forget it.

Turn your reflections into resolutions and forge a firm financial future for 2016.

In need of financial advice? I can help you out. Let’s get in touch!

Source: fin24