Written by: Salima Modack. Old Mutual Wealth, Fund & Investment Specialist
The minister of Finance, Mr Tito Mboweni is expected to table the 2020 Medium Term Budget Policy Statement (MTBPS) on Wednesday, 28 October 2020.
Whilst much needed fiscal stimulus is expected; may it sound the tide toward motivating our own personal financial stimulus.
According to the South Africa Reserve Bank Governor, Lesetja Kganyago, the repo rate has been the lowest since its introduction in 1998; and whilst anecdotally, drawing up a budget and saving seems challenging, now is the time to seize the opportunity in change.
Savings should be further categorised into short-term (emergency-fund), medium-term (goal-based, i.e. holiday, deposit on a vehicle) and long-term savings (education, retirement, major life-style changes).
According to a widely quoted National Treasury statement, during 2019 only 6% of the country’s population were on track to retire comfortably.
“Be the change you want to see in others,” – Mahatma Gandhi.
In keeping with turning the tide, how much of our personal expenditure is lost via fruitless and wasteful expenditure?
In keeping with the theme of the MTBPS – it’s time for own financial introspection. Prepare your own personal/family budget speech, and deliver it your financial dependents. Start with making budgeting, saving, investing and retirement planning, a family activity.