Kaya 959 Reporter
If you have an opportunity to have additional income this December it is important to use it wisely.
Many wise South Africans typically use a portion of their money to pay off some debt.
Paying down your debt is a great first step, and the next best step is to consider putting away some of the windfall into your retirement accounts.
You’ll get some great tax breaks and may be able to cut this year’s tax bill, too, putting even more money into your pocket at tax time.
One thing the pandemic has taught us is that we should save for the future – and this rings true for our retirement saving too.
Kaya Biz with Gugulethu Mfuphi spoke to Siyasanga Mlozana who is the Group Savings and Investment Specialist at Allan Gray, on some of the things you can do with your bonus or 13th cheque should you receive one this year.
Prioritise your future self
There are some benefits to investing your money for the future, with the adage by Benjamin Franklin speaking volumes that, ‘there are two things that are certain in life, and that death and taxes. Mlozana says there’s more you gain by making a long-term investment from a tax perspective.
“Retirement savings does help us with this. Any contribution you make towards you retirement saving you do get a tax deduction for it, which is a great benefit for saving.
Mlozana says if you find yourself in this unique position, considering the impacts of the economy and COVID 19, you really need to prioritize your future self.
“I think its important to recognize the impact of COVID 19 to us and our families, our well being as well as our livelihoods. Some of us are fortunate to have half onto our jobs. We have many impacts since COVID began, some people are fortunate to receive a bonus in the year end, or a 13th cheque. It’s important to prioritize things.”
Als0 Read: Stretch your Christmas bonus and avoid January blues
Avoid getting scams
This season is also a breeding ground for scammers who want to take you money.
“We can all fall victim of fraudster, I was once a victim of that too, its important to be vigilant whenever you talk about your finances. We getting to December now, and people will be getting their bonuses and sharing their money with Stokvels, and will have lots of cash on hand. It’s important to be mindful of scammers out there. Be careful of phasing attempts, never click on links asking you to compare you banking details.” says Mlozana
Contribute to your Emergency Fund
You must make sure you are ready for a rainy day, on thing COVID 19 has taught us is, when it rains it pours.
Experts recommend you should work to save six months’ worth of expenses in an accessible savings account in case of unexpected emergencies like a job loss, natural disaster or even car trouble.
This can give you peace of mind and a backup plan for anything unexpected that may come your way in the new year.
