Streaming issues? Report here
Just the Hits generic CapeTalk Just the Hits generic CapeTalk
Just the Hits
15:00 - 20:00
volume_up
volume_mute

Up Next: Just the Hits... with Soul
See full line-up
Just the Hits
15:00 - 20:00
Home
arrow_forward
MyMoney Online

Enjoy life and save for the future by splitting income using the '50/15/5 rule'

14 October 2019 10:30 AM

You only live once — personal finance guru Warren Ingram on divvying up your income if you're not the budgeting type.

The Money Show’s Bruce Whitfield asked Warren Ingram, a financial advisor at Galileo Capital, how to divvy up his monthly income so that he can enjoy life, save for the future and not worry about money every month.

Ingram suggests following the “50/15/5 rule”, developed by Fidelity in the USA.

It’s great for those who don’t like to budget every month.

Image courtesy of Maitree Rimthong (https://www.pexels.com/@maitree-rimthong-444156)

15: Save 15% of your pre-tax salary for retirement

Invest the 15% in a company pension plan or your own retirement annuity (RA).

If you are not saving this amount now; then arrange an annual increase in your savings.

For example, apply to increase your RA contribution by 10% next year.

5: Save 5% of take-home pay for short term savings

You should have an emergency fund that can cover three to six months’ expenses.

Ingram warns that this fund should only be for when disaster strikes, not unplanned expenses that are necessary but not an emergency (e.g. replacing a car tyre, fixing your smartphone screen, extra medical costs, maintenance of your car, etc.)

50: Spend 50% of take-home pay on essential expenses

  • Housing — mortgage, rent, property tax, utilities (electricity, etc.), homeowners’ insurance, and rates

  • Food — groceries only; not restaurant meals

  • Health care — medical aid and out-of-pocket expenses (e.g. prescriptions, co-payments, etc.)

  • Transportation — commuter fares or car payments, petrol, car insurance, parking, tolls, maintenance

  • Childcare — day care, education

  • Debt payments and other obligations — credit card payments, student loan payments, child support and life insurance

The rest

The rest of your total income can go towards entertainment, clothes, luxuries, holidays, etc.

Want to retire before you’re 65?

Saving and investing 15% of your pre-tax salary for 40 years should allow you to retire when you’re 65 years old.

If that’s too old for you; you’ll need to cut from “the rest” to increase your retirement savings.

For more detail, listen to the interview in the audio below.

Get the 10 most-read articles of the week from Bruce Whitfield’s The Money Show, emailed to you every Friday morning:


14 October 2019 10:30 AM

Recommended

More from MyMoney Online

Woman saving money piggy bank mask 123rf 123rfbusiness 123rflifestyle

Supersaver Julia has changed lives, and she can change yours! – Bruce Whitfield

9 July 2020 3:00 PM

Need the inspiration to save? The Money Show’s Bruce Whitfield interviews “Supersaver Julia” at around 7:15 pm tonight.

Share this:
Read More arrow_forward

black-family-house-for-sale-sold-property-household-investment-bond-rent-123rf

'Demand for property below R3 million is starting to recover'

8 July 2020 1:35 PM

For some properties – with interest rates at half-a-century lows – it’s becoming cheaper to buy than to rent.

Share this:
Read More arrow_forward

Covid-19 insurance 123rf 123rfbusiness 123rflifestyle 123rfpersonalfinance

Shareholder activists grill Santam about 'business interruption insurance'

7 July 2020 6:47 PM

The lockdown did it – not the pandemic – so we can’t pay, argues Santam. Bruce Whitfield interviews Tracey Davies of Just Share.

Share this:
Read More arrow_forward

Aisha Pandor SweepSouth Alen Ribic

Job won’t make you rich. You must earn in your sleep - Aisha Pandor, SweepSouth

6 July 2020 8:39 PM

Bruce Whitfield talks to SweepSouth cofounder Aisha Pandor about her attitude to money (hopes and fears, successes and failures).

Share this:
Read More arrow_forward

Crazy funny man working from home on desktop computer 123rf 123rfbusiness

Job hunting? This CEO is hiring and interviewing remotely – he has advice

2 July 2020 2:15 PM

"We’ve hired people we haven’t met in person," says Karl Hammerschmidt. "There are things you can still do to impress."

Share this:
Read More arrow_forward

hyundai i20

Best 2nd-hand cars below R80 000 – actual examples you can buy, right now

1 July 2020 3:05 PM

"The car that stood out the most was a 2014 Hyundai i20 with just 67 000 on the clock," says motoring journalist Ciro de Siena.

Share this:
Read More arrow_forward

Naked Insurance

Car insurance from R180 per month – and you don’t pay if you don’t drive

30 June 2020 8:03 PM

Meet Alex Thomson of Naked Insurance, a high-tech company with vastly lower operating costs than most traditional insurers.

Share this:
Read More arrow_forward

Toyota-car-logo-vehicle-automotive-industry-car-manufacturers-123rf

Best 2nd-hand car to buy for less than R80 000

25 June 2020 2:42 PM

Motoring journalist Ciro de Siena discusses a few easy-to-maintain, reliable pre-owned cheapies for under R80 000.

Share this:
Read More arrow_forward

rich wealthy businessman salary 123rf 123rfbusiness

'Eskom has 3rd-highest average salary in South Africa'

25 June 2020 11:58 AM

MultiChoice, Vodacom, Eskom and the SABC pay the highest average salaries in South Africa, according to MyBroadband.

Share this:
Read More arrow_forward

Finance Minister Tito Mboweni

[WATCH] Finance Minister Tito Mboweni presents historic emergency budget

24 June 2020 11:48 AM

Finance Minister Tito Mboweni's vital address is done and dusted. Watch it, right here.

Share this:
Read More arrow_forward