Is this you? “Pay day again. Bills and more bills to tackle!” You are finding it difficult to balance your income with your expenses and you ask yourself, “How am I going to make it to my next pay day?” Your financial equation shows Income < Bills, but in reality it should be saying Income = Bills + Investments. How can you achieve this you ask? The answer is Money Management! Whatever stage you are in life, start practicing now and maintain consistency to achieve financial security.
Money Management involves a critical process of analyzing how you are currently spending your money, through the creation of a budget and putting in place a plan to achieve future goals. There are five (5) simple steps in this process. You should:
Set SMART Goals
Your goals should be SMART- Specific, Measurable, Attainable, Realistic and Timely. One of the most important goals for any investor is investing for your retirement. Start investing for your golden age today by opening a Barita Capital Growth Fund and/or Barita Money Market Fund. Both these Funds are Unit Trusts Funds that enables small and large investors to pool their investments in a common fund, and the investment minimums are usually much lower than other investments. The funds are invested in selected portfolios which are professionally managed to maximize the greatest returns to the investor.
For example, if you made an initial investment of J$10,000.00 in the Capital Growth Fund and consistently added deposits of J$1,000.00 per month for years (5) years*, your investment would have been valued at J$1,257,555 growing at a rate of approximately 106%, after having actually invested a total of J$610,000. Investing a larger lump sum will give you more earnings over the long term and allow you to reach your goal for financial security.
Build a Budget
Write a budget. Yes, it is hard to follow and you may not remember all your expenses, but you need a guide. First track your expenses for one month, then do an evaluation for all expenditures on your budget, asking yourself – Is it necessary? If yes why? Is there a cheaper substitute? And get a second opinion.
Having prepared your budget and identified areas where you can spend less, some of the ways in which you can cut expenses are to:
- Conserve on gas – Instead of driving to buy the newspaper on the weekend, get some exercise by walking or jogging instead.
- Conserve on electricity, water and telephone usage – Take time to have a family hour and turn off the television or turn on the water heater 15 minutes before you shower and consider visiting friends more as opposed to speaking on the phone.
Put in place salary deductions, pre-authorised payments or standing orders for your investment. This way, your investment is made automatically before your start paying your bills and it’s hassle-free.
Invest Your Savings and Be Consistent
Funds saved on gas and electricity bills can be used as an additional deposit to your account and you should make a rule to invest at least 10% of any monetary gifts received. Consistent investment is key to building your account. Do not expect to make one lodgement of J$5,000.00 and five years later be looking for thousands. The more you add, the better your returns, and remember, “One one coco full basket!”
Why wait? Get started! Call a Barita Advisor TODAY to open an account. We will provide you with a letter to take to your employers to start salary deductions and a budget form to record your expenses. Let Barita show you how to make your money work for you.
*Investing in the Capital Growth Fund monthly from November 27, 2013 to December 31, 2018.