7 Reasons You Should Save Up An Emergency Fund

Many people think an emergency fund is a waste of time and money but no matter how prepared you are financially, life has a way of throwing you curve balls when you expected the least. It’s because of those unexpected expenses that many financial advisers suggest keeping at least three months of expenses saved up somewhere in a savings account.

Losing your job

Job loss is the number one reason to have an emergency fund. If you lose your job and struggle to find another one quickly, it could be detrimental. But with an emergency fund, you could live off your savings until you find another job and you don’t have to go for the first company willing to hire, you can find a job that suits you.

Medical emergencies

Even if you have a medical aid, a trip to the emergency room can create severe financial stress. There are always co-payments that the medical aid doesn’t cover even when it comes to planned surgery or dental work.

Emergency pet care

Your pet is part of the family, and you can easily accommodate regular expenses of pet ownership. But what happens when you have to pay thousands of Rands if your cat or dog needed surgery? Would you be able to cover the expenses from your monthly budget? Not many people can afford emergency pet care and to put down a pet for no good reason isn’t an option.

Vehicle repairs

With the condition some of our roads are in, flat tyres are an everyday thing. Also, cars break and need to be fixed and what’s worse than a surprise car repair bill? With a sufficient emergency fund, you wouldn’t have to stress about it, and you could even afford a temporary rental car.

Home repairs

Burst geyser? You have insurance to cover the significant expenses, but insurance doesn’t cover everything that could go wrong.  And even if it does, there will always be a copayment.

Unplanned Pregnancy

Unplanned pregnancies happen all the time, and with an emergency fund, you’ll be in a position to prepare for your new baby as well as cover the bills if your job doesn’t offer paid parental leave.

Death in the Family

When a close relative or friend passes away in another part of the country, an unplanned trip to the funeral can be extremely costly. Not only will you have to pay airfare or petrol expenses but you might also need to pay for accommodation during your stay.

All of these things can cause an otherwise stable financial situation to quickly collapse into chaos, forcing you to use your credit cards.

Much of this can be minimised by simply maintaining a cash emergency fund. And when you’ve used some of the funds, make sure you put it back.

Trying To Get Out Of Debt: Why It’s Better To Buy A Used Car Than A New One

Next to a home, a car may be the regular person’s biggest source of debt. Very few of us live within walking distance from our place of work, and if we do, it may not be safe. In today’s society, a dependable vehicle is a basic need. However, in case you are already in financial trouble, it makes sense that you assess whether you can afford that shiny new car, or should instead make your way to the used cars division.

Everybody wants to drive a brand new car; however, it is imperative to understand that a car is not an asset. Should you be in debt already, you can’t allow yourself to be misled because can afford the monthly repayment on a new car. You will have to think long-term, and don’t overlook the hidden expenses.

Below are five things to consider when buying your next car:

  1. Second-hand cars are cheaper

You will have to look far and wide to find a brand new car less expensive than a second-hand one with the same features. You might not be able to pay for that new luxury car you’ve dreamed about, but one that’s a couple of years old might suit your budget.

  1. A vehicle depreciates in value

A new car will lose about 20 to 25% of its value the moment you drive it out of the dealer’s yard. According to studies, your car will lose nearly 70% of its value after five years.

  1. Reducing insurance costs

The primary element in determining the fee for vehicle insurance is the value of the car. Since a used car has significantly less value compared to the more recent version, the expense of insurance will be less.

  1. New cars are nice but expensive

Purchasing a new car is not automatically the best option. The latest statistics reveal that 35% of car buyers sign up for a 60 – 72-month loan at an average interest rate of 10%. New car buyers usually don’t think about the bigger expenses coupled with buying a brand new car.

  1. Remember the real cost of car ownership

A car creates several expenses and obligations as time passes. Ownership fees consist of repairs and maintenance, loan repayments, fuel and insurance payments. These will have a substantial impact on your monthly finances.

Think about what you could do with the money you will have spent on your new car every month. If you get into the habit of buying a new car every few years, you are not making sound financial decisions. Even though it may feel great to impress friends and family or travel in style, wasting funds on a new car is a sure way to retire penniless.

If you wish to become free of debt, instead choose a reliable second-hand car.

Stay Out Of Debt: Buy Second Hand

Most people are aware that purchasing a new car is a terrible financial decision. Buying a used car provides considerable long-term savings. But are you mindful of the fact that there is a growing number of individuals that attempt to buy everything used? Or maybe not everything, but at least whenever possible.

In today’s difficult financial times, everyone is trying to make ends meet and buying second hand can increase your savings and help your money go further.

Not only will you save money but you will assist the environment. Buying used items decrease manufacturing demands while keeping more goods out of the landfill! Since a great deal of man-made things are consistently disposed of, re-using provides a longer life for everyday household items another family could use, thus saving the Earth as a result.

Second-hand products are typically associated with bad quality, which is not the scenario at reputable merchants. There is simply no need to buy everything brand new. If you wish to save some money, take into consideration thrift stores, consignment stores, used booksellers, etc. You should be cautious of falling into the trap of getting more than you need since the items are so inexpensive, or you might not be doing yourself a favour after all.

Things you should buy second hand:

Furniture

Used doesn’t have to mean ugly or worn out. With how often people move or just change their minds after a purchase, second-hand furniture stores have an excess of high-quality couches, tables, electronics, and even cheap baby furniture.

Cars

Buying a used car is a much wiser choice than buying new. If you purchase a vehicle that’s a couple of years old, it will still depreciate, but you’ll lose less money less rapidly. And you’ll avoid that big initial depreciation strike the previous owner took.

Sports Equipment

If you’re planning to go ski for the first time, it doesn’t seem sensible to purchase a new pair of skis. When you or your kid is taking part in a new sport, consider buying used gear first.

Books

Unless you intend to display the book on your coffee table or purchasing it as part of a collection you plan to preserve for a long time; you don’t have to pay more just to be the first person to read the book.

Musical Instruments

Children frequently take on musical instruments for only a year or two at a time, which suggests secondhand options are plentiful, and you won’t want to spend money on something new unless they are ready for a serious commitment.

Make sure to only shop at reputable stores that can guarantee high-quality products. An excellent second-hand retailer should have systems in place to ensure that the goods you buy are not defective; otherwise, your intended saving could end up becoming a waste of funds.

Throughout the course of a year, you’ll save hundreds if not thousands of Rands, resulting in a budget surplus you can either put towards your emergency fund or treat yourself and loved

Filing Your Tax Return The Right Way To Avoid Costly Mistakes.

Ever wondered why exactly you need to file a tax return? Should you earn below R350 000, you don’t have to file a tax return, but keep in mind; you can’t receive a tax refund when you don’t. Below are things to remember when submitting your tax return:

How do you get a tax refund?

Every month, you are taxed on the amount of money you earned in that month. Should the amount you get vary, you might pay tax at an increased rate for that month. At the financial year end, you will have to ensure that you paid tax at the appropriate rate for your annual total. Therefore, you may need to pay money back to SARS or receive a refund. Also, several expenses are “tax deductible”, consequently the amount you spend on them is subtracted from your total taxed earnings. For instance, healthcare contributions and retirement annuities.

Register for eFiling

A lot of individuals are still submitting their tax return manually thus losing out on the advantages of SARS eFiling. It allows you to submit your documents in an eco-friendly manner, steer clear of long lines at the SARS offices and help with getting your documents processed quicker.

Don’t neglect to submit your tax returns

It’s easy to forget to file your tax return every so often. However, you should not make a habit of it. Not filing a tax return when due and not paying money you owe are considered a criminal offence in South Africa. If you neglect to pay your taxes, SARS can collect what you owe in several ways or issue a judgement to get you blacklisted.

Ensure that there are no mistakes on your tax return

SARS audits people randomly; therefore, you need to make sure you don’t participate in any potentially illegal or high-risk projects, and your tax returns are error free. You have to have the appropriate paperwork and legal evidence for each claim you make; including supporting documentation, expense slips, logbooks and contribution certificates for medical aid, retirement annuity, etc.

Beware of the due date

SARS opened tax season for individuals on 1 July 2017. Non-provisional taxpayers making use of eFiling need to file their returns by 24 November 2017 while provisional taxpayers using eFiling need to file their tax returns by 31 January 2018. Non-provisional and provisional taxpayers who choose to file their return manually will need to submit it via post or at your nearest SARS branch drop box by 27 September 2017.

Employ help if you can’t do it yourself

If you are incapable of preparing all your documents or you don’t know how to review your finances, get a tax specialist or a financial advisor to assist you with your tax returns.

Watch out for scams

Sadly, fraudsters are becoming incredibly innovative, and it is now popular for taxpayers to receive emails which state they are from SARS, informing you of a tax refund due, and asking for your banking details to process the payment. Visit the SARS website for current information about any new scams, but be aware that SARS will not require your banking details via email or SMS.