"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
"An investment in knowledge pays the best interest"
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BLOG
JAN
10
2017
Poverty Is Only
One Pay-cheque Away
It's a shocking reality that for most people it only takes one pay-cheque for them to plunge into poverty. If you were to lose your job, for how many months would you be able to take care of your basic expenses such as rent, car payments and groceries, etc.
How many days or months you can survive without the monthly pay-cheque you receive, if all of a sudden you lost your job? How long would you be able to survive with the money you have? Many South Africans don't have emergency savings such as R10 000 for an emergency visit to the hospital or other emergencies.
In the current economy we live in definite job security is a thing of the past. With business going out of business over night, while other companies keep on laying off workers in greater numbers uncertainty has become a norm. Therefore having a secondary form of financial security has become more relevant than before.
The first step would be to add up all the expenses you incur per month, these will be your living expenses. Then figure out which of those expenses you wouldn't be able to live without, i.e. rent, electricity, food etc.
Example
Alice earns a monthly net salary of R24 000
This is what her monthly expenses look like:
1. Bond
2. Car payment
3. Insurance
4. Water & Electricity
5. Medical Aid
6. Fuel
7. Groceries
8. Entertainment
9. Clothing
TOTAL
Alice has R3800 left over every month which she saves.
The next step is to calculate how much money you have in the bank account and in the form of assets that can be sold for cash such as stocks/shares (from the stock market). Alice has R17000 in a savings account and R15 600 in Old Mutual Shares. In total she has R32600. If Alice were to lose her Job today she would be able to pay her expenses for just over one and a half months, provided she maintains her current standard of living. If she were to cut back on unnecessary expenses she would be able to stretch it to just over two months. It would take Alice two months to plunge into poverty, she would be unable to pay for her car and apartment. In the following months thereafter the banks would come to put her apartment on foreclosure while her car is repossessed.
It's a scary thought to think it only takes a month or two to lose everything you've worked so hard for. It's crucial that as a worker you have a backup plan in-case the worst were to happen.
RULES TO LIVE BY TO SURVIVE
If you so happen to lose your job, the best thing you can do to stay afloat and minimise your expenses is to:
As a rule make sure your bond or rent doesn't cost you more than a third of your salary.
R7500
R5100
R900
R600
R1300
R1800
R800
R700
R1500
R20 200
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