South Africans are facing a tough year, and when it comes to your financial future, do you prioritise saving for your retirement or educating your children? We give you four reasons why you should make your retirement your biggest priority.
1. You can’t borrow for your retirement
Conversely, you can take out a loan to pay for your kid’s education. You should also look at applying for any bursary you can, to help reduce school fees. Encourage your child to earn money during a gap year and to spend some time thinking about the career they want.
2. Compound interest
With this type of interest, the earlier you start, the more exponentially your money will grow. It’s highly recommended that you start saving for your retirement in your 20s, where you should put away at least 10% of your salary every month. If you wait until your 30s the amount grows to 15% and in your 40s it’s advised to save 20%.
3. Kids aren’t a retirement fund
It’s important that you save for your retirement so that you don’t rely on your children to support you later on in life. In all likelihood they will have children of their own, and so it’s an unfair financial burden to expect them to pay for you whilst also paying for their own children.
4. Set the right example
Your children will learn their financial habits from you, so it’s important to set a good example or at least to be open about mistakes you have made. Teach them about the importance of saving and that they should start putting away money for their retirement from their very first pay cheque.
It may sound cold but it’s important to focus on yourself first, and put money away for your retirement, otherwise you will be an even bigger financial burden on your children later on in your life. Don’t delay putting money away for retirement – even if you start today.
As a GetMore member you can call us on 084 11 438 48 and speak to our financial gurus – for free – to get the right advice about saving for your future, while giving your kids the best education you can afford.