Practical financial planning tips for parents
As parents and financial providers, the responsibility to shape both your and your children’s financial futures can be daunting. Balancing immediate needs with long-term goals requires careful planning and strategic action.
Here are eight practical tips from Old Mutual to help you secure a prosperous tomorrow for your young ones while maintaining financial stability today.
● Prioritise Educational Savings
Investing in your children’s education is one of the most impactful steps you can take. With educational inflation in South Africa currently around 7%, starting an education savings plan as early as possible is crucial. There are several free online tools and calculators to help parents get started.
● Plan for Retirement
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Reviewing and implementing your retirement plan is essential. Regular contributions to a retirement solution, such as a retirement annuity, can accumulate significantly over time and offer substantial tax benefits.
● Build an Emergency Fund
An emergency fund provides a financial safety net during unexpected events like retrenchment or urgent home repairs. Aim to save at least three to six months' worth of living expenses. This fund should be easily accessible and kept separate from regular savings to ensure your family can weather financial storms without significant disruption.