Make three sacrifices for the short-term tax benefits, as well as the obvious long-term benefits of increasing your retirement contributions.
Retirement and death are inevitable. Or is it taxes? Anyway, at some point, you’re going to at least want to stop working before you die, right? How do you want that period of life to look? Well, we definitely don’t want government grants to be involved. We’re leaning more towards cruises, spoiling the grandkids with extravagant gifts, and retiring to the coast.
The mistake a lot of people make with their finances, is that they settle for what’s comfortable. Not what they want, not what they truly desire. Just what doesn’t cause too much pain or discomfort.You live like that long enough and you start to equate all pain and discomfort, however temporary, with something negative. As opposed to being a necessary sacrifice for your own good and the good of your future. No pain, no gain.When it comes to your retirement, the way that pans out comes down, decisively, to whether you made sacrifices, or excuses. Whether your comfort, or the life you envision for yourself, influences the choices you make today.
3 Sacrifices To Make To Increase Your Retirement Contributions
Take a look at your bank statement. A close look. Scrutinise your expenses. Where does it hurt to see your money go? Paying a high interest loan? Your credit card? Take-outs? Traffic fines? Raiding the temptation isle at the supermarket? Buying too many rounds at the bar?Generally, it will probably be spur-of-the-moment decisions or expenses you’re paying for now, but not really seeing the value of in your life. When you look at spending in terms of how it’s adding value to your life, it will be easy to make some of the following cutbacks.
Before you gasp in shock and horror, let’s look at the logic. You spend at least R700 for all the channels. How many do you watch? If you’re like most South Africans with a healthy exposure to popular culture, you’re probably subscribed to a streaming service. Netflix, Showmax, Prime, Pureflix… Even two of these subscriptions do not make up half of what you’re paying for DStv.So, cut it. And put the money you save towards your provident fund. “But the sports!” you cry. You have friends, family, the mall, Spur. You’ll survive.
2. Your Gym Contract
Don’t kid yourself. If you haven’t gone to gym for more than a month, you’re robbing yourself and your bikini body. Some people make the argument that, if you’re paying a whole lot per month, it will motivate you to go to the gym. But, unless you fundamentally change your behaviour, and your habits, no amount of money is going to hit the treadmill for you.If you haven’t signed away your soul to a 12 month lock-in (is that even legal anymore?), cut your losses. There are loads of free opportunities to work out for those who are serious. Register for a parkrun, or hit the public outdoor gyms in your city. Youtube some seven-minute workouts and go to town. And, while you’re sweating, your pension will be growing.
3. Sell Your Car
Now, we know a bus strike may not be the right time to suggest you start using public transport. But, since a lot of people are starting to work remotely anyway, it may not even be necessary, There are also a number of two-income households that have two cars. We get it, it’s convenient. But, how much is that convenience really costing you?It’s not just the monthly instalment to honour your car finance agreement. It’s the insurance, your motor plan, fuel, regular services, general wear and tear, even valet services. It can really add up. Make a list of how much your car actually costs you and sit down with your financial adviser and see how much of your retirement shortfall you could cover, should you decide to carpool with your significant other / colleague / neighbour.