Settling debt in general is a very effective strategy to save money over the long term. Paying off BAD DEBT, where the interest rate is higher than the return you could earn on general investment products, is often far more effective than trying to invest while still carrying expensive debt. A home loan is generally referred to as GOOD DEBT, but that does not mean it is cheap. Servicing your home loan through a monthly repayment can be expensive, especially when you are starting out as a young bondholder or as a young family. Once the bond repayment and monthly living expenses are paid, there is often very little room left for additional long-term savings. Higher-return investment products, such as unit trusts, also usually require fairly high minimum monthly contributions. As a result, saving for the long term can feel like an impossible goal. However, it is important not to feel discouraged. Even a small additional amount, such as R200 per month, can result in HUGE savings over time.
Let me show you how: |
