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Advice for 20somethings by a 20something
by: Ryan Blake
BUSINESS LOUNGE
Mario Ahjahorie, a Financial Analyst at Scotia DBG Investments advises One of the best ways to save after leaving a tertiary level institution is to continue living the life of a student even after being employed. Simply put, this means home cooked meals over fast-food eateries and traditional restaurants. Stick to a budget as if you received money from your parents to last the week/month. Mario Ahjahorie, a Financial Analyst at Scotia DBG Investments advises that as a rule of thumb, you MUST save at least ten percent (10%) of your gross pay. “Consider investing as much as half your savings in the stock market; empirical evidence has shown that stocks yield higher returns compared to other instruments over the long term,” he adds. “A common error I see some of my friends make is converting the majority of their earnings into United States Currency (USD); don’t convert all Jamaican earnings to USD as it might not be worth it.
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afford to take more risks. If an investment falls through, for example, they have an entire lifetime to recover from their financial losses. 3 HUGE ERRORS TO AVOID! Borrowing money for ‘lifestyle’ purchases: Borrowing should be for good long-term investments like education, a home, or starting a business. If you borrow for vacations, eating out and the latest fashion trends; you’ll be spending your hard-earned money paying back the debt plus interest in the future and have very little to show for it. Not exploring all the savings and retirement plans available to you either through your employer or independently: There are many retirement programs available today that can benefit every wage earner, especially on a pre-tax basis. Depending on your circumstances, you may be eligible for any number of taxdeferred retirement programs. These may fall into several categories from group to individual plans, or defined contribution plans. It is important to investigate all your opportunities to determine what options best suit your specific retirement needs. Seek the help of a financial advisor, if necessary to find out what plans might be right for you. Going into significant debt for a car: If at all possible, pay cash for a car. Maybe that means you won’t be able to get the exact car you wanted, but remember that a car is not an investment. It depreciates in value from the moment you drive it off the lot. Consider buying a used car. Not only is the price lower, but you could pay less for insurance. Just be sure to have a mechanic you trust check it out first. If you do take out a car loan, make sure you shop carefully for the best deal.
“Investing isn’t for the old or the very wealthy. Different strategies will be used by young adults as compared to a retired couple. Being young and therefore having more time in life means that younger people have more time to invest and can
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10 Smart Steps to: Manage Your Credit Cards Provided by: Financially S.M.A.R.T. Services
Question: I want to apply for my first
credit card, but I’m a little afraid of losing control of my spending when I get it. Is there any benefit to owning a credit card? How can I avoid incurring unnecessary debt?
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sarily a bad thing. A credit card is just a tool that can help you manage your cash flow and bill payments; but if used incorrectly it can create big problems. Here are some smart tips to help you to control your credit card:
had to use the card as a short-term credit facility, make a plan to pay off that expense within the shortest possible time.
8. Don’t let the card out of your sight. Corrupt persons can use an electronic device called a skimmer to scan your card details and sell your information to other people, or even clone your card.
1. Buy only what you can afford. Your personal
budget (go to www.financiallysmartonline.com to download one) can help you to identify expenses that you can pay with a credit card. Don’t charge more on your card than you would have spent if you were using cash.
2. Know how you are going to pay your bill.
Don’t use the card unless you’re sure that you already have the money to pay for the expense, or that you’ll have it by the time the credit card bill is due.
3. Manage your credit line. Don’t accumulate
several cards and large credit limits. Increasing your credit amounts can tempt you to overspend, so keep your available credit in line with your lifestyle.
4. Note the cut-off date for recording transac-
tions. You can extend the payment time for a purchase by buying it after the statement date. If your statement date is the 25th monthly, something bought on the 26th will not appear on the upcoming bill.
5. Avoid high fees and charges. Pay your bill
on or before the due date to avoid a late payment penalty. If you’re near to your limit, verify your credit availability to avoid an over-the-limit charge.
6.
Never get cash advances. There are no interest charges on regular purchases if you pay the bill in full by the due date. With cash advances, interest is immediately calculated from withdrawal until the repayment date.
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9. Keep tabs on your transactions. Check your statements to verify all purchases, or use online banking to track the activity. Immediately report any disputed item to the credit card company.
10.
Take advantage of incentives. Get credit cards which give you points that can be redeemed for goods and services at participating merchants, frequent flyer miles or cash rebates.
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Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email advice@financiallysmartonline.com with comments or questions.
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MONEY $MART...
Answer: Having a credit card isn’t neces-
7. Pay off all your bills in full each month. If you
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Valuable Life Lessons
I
n my first job at a public relations firm, I was required to attend clients’ events and write press releases for the newspapers. I had no particular knowledge about, nor interest in PR; I had only applied for this job because my best friend had worked there in the summer and had enjoyed it. I remember my first attempt at writing a press release. My boss, Carmen Tipling, took one look at my effort (which I thought was pretty good) and dryly told me that this was not the way that it should be done. To get your PR items carried in the newspaper, Tipling explained, you had to write like a journalist.
Embrace constructive criticism
There began my internship into the world of journalistic thinking and writing. Tipling, a veteran in Jamaica’s newspaper business, didn’t spare any red ink in correcting my work. She drilled me in the principles of good reporting, teaching me many valuable life lessons along the way. I have vivid memories of the day I handed a release to her, and with a curt nod of the head, she returned it to me without corrections. It appeared that my writing had finally attained Tipling’s high standards - I felt like I had won an Olympic gold medal! Although the fields of public relations and journalism didn’t prove to be my calling, today I am very appreciative that I absorbed these early lessons. For many years, my writing skills remained unused, as my career choices didn’t require them. I t
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was not until fourteen years later that an opportunity came to combine my true passion – helping people to become financially successful – with my dormant journalistic abilities. I decided to write a personal finance
column in one of Jamaica’s national newspapers, to spread my message to many more people than my day job would allow.
New profit from old lessons
The lessons I had learned have now allowed me to create my own livelihood. My articles have formed the framework for a comprehensive personal finance training business; and have given me endless sources of additional income. Years ago, I would never have imagined that Tipling’s writing boot camp could have paved the way for a lucrative, fulfilling career. However, because I embraced those lessons and gathered all I could from the experts, I have been able to see my hard work pay off. Wherever you are now, whether in a dead-end job or struggling to build your own business, look around for the lessons that life maybe trying to teach you. They may come from a picky supervisor or a demanding bank officer; from a harsh appraisal or a disappointing venture. Embrace the education - enlighten yourself and you might just end up earning big time!
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Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline. com. Email Cherryl at advice@financiallysmartonline. com. Please add this address to your email address book in order to ensure you receive a response.
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AN ENTREPRENEUR’S LIFE
by: Cherryl Hanson Simpson
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Credits Publisher eZines Limited Managing Director Tyrone Wilson Your Money Reporters Andre’ Burnett Ryan Blake Kenartur Mitchell Jr. Latoya Hutchinson Columnist Cherryl Hanson Simpson Financially S.M.A.R.T Services Design and Layout Omar Phinn Subscription subscription@yourmoneyezine.com Editorial editor@yourmoneyezine.com Your Money eZine is a product of eZines Limited, and is distributed via e-mail and other online sources such as Facebook. To subscribe FREE, log onto www.yourmoneyezine.com today or email to subscription@yourmoneyezine.com Advertising advertising@yourmoneyezine.com
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