Holiday advice

Don't eat away at your nest egg

Don't eat away at your nest egg
nest egg.jpg

According to Henry van Deventer, head of business development at Acsis, a leading financial advisory company, in order for individuals to preserve this festive lifestyle, it is important for them to think beyond chocolate eggs and ensure that they are creating a comfortable nest egg for themselves and their family. 

Van Deventer says that a nest egg refers to a special sum of money saved or invested for one specific future purpose, whether it be for retirement or to pay university fees. “A nest egg is vital in terms of a comfortable retirement as many individuals find themselves without the sufficient funds to support their current lifestyle when they retire.”

A recent report by the Employee Benefit Research Institute in America revealed that the majority of workers surveyed were not saving sufficiently for retirement, with 37% saying they are significantly falling behind in planning and saving for retirement, and 30% saying they were less behind.

Van Deventer says that South Africans are finding themselves in the same situation. “The majority of South Africans are battling to save towards a nest egg and are instead turning to debt to fund their lifestyle.

"It’s been reported that nearly half of credit active consumers are struggling with debt repayments and with continually rising living expenses, such as petrol, electricity and food prices, the debt situation is likely to get worse for individuals, before it improves.”

It was also revealed that the average age of consumers falling into debt fell from 42 to 34 in the last five years. “This figure is extremely startling as these individuals are unlikely to save for a nest egg. It is advisable for individuals to start saving when they begin to earn a salary as the sooner you start saving, the more time your money has the opportunity to grow and ultimately ensure a healthy financial future.”

He adds that no matter the situation individuals find themselves in, whether it is that they are in debt or only starting to save for their nest egg in their forties, it should not prevent them from starting to save.

“It may seem like a daunting task putting extra money aside on top of a long list of monthly expenses, but it is never too late to start saving. While repaying your debt as quickly as possible should be a priority, it is still possible to put some additional money aside each month.”

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