Money Moves: Financial advice for young St Lucians
When you’re young, saving money can seem like an impossible task.
Unfortunately, personal finance is not a required subject in school. As a result, the lack of basic financial education leaves young people clueless about how to manage their money and stay out of debt.
To help you get started, a young lady from Gros Islet, Raejean Montoute, has formulated a few extremely useful financial tips to help the young people of St Lucia manage their finances better.
Here are a few tips to stay smart with your money:
1. Have a permanent budget
Your salary should be permanently divided in set percentages for easy management. For example:
Needs - bills, food, transportation - 50%
Wants - netflix, new shoes, fetes/parties - 25%
Short term savings - vacation, doctor visit, educational course - 10%
Long term savings - house, car or getting your degree - 15%
2. Have multiple accounts
You should never have all your eggs in one basket and given that you have divided your salary by set percentages, you would need different savings accounts to host those funds.
I advise having at least two different savings accounts, preferably one with a bank and one with a Credit Union, so you can reap the benefits of both.
3. Start a retirement plan
The mistake a lot of people make about retirement planning, is that they start a retirement plan only when they are approaching retirement. The earlier you start putting away money for retirement the better!
Most insurance agencies and banks carry retirement plans.
4. Educate yourself on taxes, loans and insurance.
All these deductions that come off your salary every month - PAYE, NIC, Insurance, Company Pension, do you know why? What are the benefits from paying them? It’s important that you take the time to understand these schemes and how you are benefiting or can benefit from them. It’s your money!
Loans can be ticklish and some companies, honestly, can sell you an awful loan deal. However, it's responsible to take the time to understand the terms and conditions of the various loan packages and the technical terms like interest rates, depreciating balance, fixed rates, etc.
5. Invest in multiple streams of income.
What if you lose your job? Or your one business takes a downturn, earlier I mentioned not putting all of eggs in one basket, the same concept applies here.
Bonus Tip: Treating yourself is fine, but don’t go broke doing it. Save for the treatment.