Money How to be a grown-up about money

Spoiler alert: it gets eas­ier once you tune in to what you want.

Glamour (South Africa) - - All About You -

Can’t de­cide whether to splurge on a hol­i­day or save for re­tire­ment? Ac­cord­ing to So­ci­ety of Grownups (SOG), a fi­nan­cial ed­u­ca­tion cen­tre that pro­vides ad­vice and classes, there’s no sin­gle best an­swer. Their phi­los­o­phy? Use your per­sonal val­ues to de­cide when to spend and save. Karen Carr, fi­nan­cial plan­ner at SOG, helps with your fi­nan­cial is­sues, here. “I’m wor­ried about my re­tire­ment. I’ve taken full ad­van­tage of my em­ployer’s pen­sion plan and I want to save for a house. What’s the next best step?”

– Claire, 24, ed­i­to­rial as­sis­tant

“Con­grat­u­la­tions on tak­ing your com­pany plan funds,” says Karen. “So many peo­ple leave that free money on the ta­ble.” Now you should open a re­tire­ment sav­ings plan that can help you with both your goals. “This plan isn’t tied to your em­ployer, so you’ll have a full choice of in­vest­ment op­tions,” she says. “If you choose an un­taxed re­tire­ment plan, any con­tri­bu­tions can be taken out tax-free and with­out penal­ties, like cash for a de­posit on a house.”

“I’m debt-free and I’m sav­ing for my wed­ding, but my friends are in­vest­ing. Should I be, too?”

– Pa­tri­cia, 30, med­i­cal res­i­dent

Are you ready to com­mit to the stock mar­ket? “Money in an in­vest­ment ac­count needs three to five years to grow,” says Karen. If you’ll need that money ear­lier ( like for a wed­ding dress), it doesn’t make sense to choose stocks. Rather keep your cash in a sav­ings ac­count. But if you can put more money aside than you’ll need for the wed­ding, then stocks are fine.

“I’m go­ing back to work full-time af­ter hav­ing a baby, and my fiancé just got a big raise. If we get mar­ried, will we take a hit fi­nan­cially?”

– Amy, 39, teacher

“Many clients worry about the ‘mar­riage penalty’ (a change in a cou­ple’s tax bill as a re­sult of get­ting mar­ried),” says Karen. This can leave cou­ples pay­ing more in taxes if they file jointly than if they file as in­di­vid­u­als. Use a tax penalty cal­cu­la­tor to find out ex­actly how mar­riage will af­fect your re­turn – of­ten, the im­pact is neg­li­gi­ble, Karen says.

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