Debt can be one of two things, an enabler that gives you cash when you need it or another asset that adds value to your life. While long term debt can allow you to buy assets that can help you to create a better life, short term debt can land you a lot of high interest debt. 

Interest can add a lot to your monthly repayments. The interest rate you pay has a large effect on your monthly repayments, thus lowering your interest rate can make your debt more affordable. Interest rates are based on risk, therefore you need to lower the risk to lower the rate.  

A bond or home mortgage is lower risk than an unsecured credit card, personal loan, or retail account, as it is backed by the property itself. This allows you to get a low interest rate on your home bond.  

A great way to make use of your low interest facility is to refinance your debt into your bond. This allows you to take advantage of the low interest rate and consolidate your debt into one easy repayment.  

How Home Bonds Work? 

Before you can understand how to refinance your debt into your home bond, you need to understand how a home bond works and the components that make it up.  

A home bond is a property backed loan that allows you to purchase a house without having the full capital required on hand. You often have to put down a deposit, industry average is 10%, and then there are strict affordability requirements to get approved. 

  There are three main components in a home bond: 

• Capital Owed – Capital owed is the amount of money you owe from your initial loan before interest and fees. If you were to take out a R1 000 000 bond, your capital owed would start at R1 000 000 and decrease from there. 
• Interest Owed – This amount is the amount of money you owe over time as interest. This amount will decrease as you make repayments and can decrease more if you make early or lump sum payments. If your bond has a variable interest rate, the interest owed can change with the interest rate changes. 

• Value Available – This is the amount of money you have paid off in your bond. If we use the R1 000 000 example, after a number of years you have paid the amount of capital owed down to R200 000. This means you value in your bond in R800 000. While this may not be directly available to you, it means that you owe less than your home is worth and have value available.  

How Refinancing Works? 

When you refinance your home bond you are using the value available to pay off your other debts. Depending on how long you have had your home, you may be able to have it reassessed and get a bigger home bond. This is because property values usually increase over time. This will depend on other factors besides the value of your home, including your income, credit score, affordability and Loan to Value. 

The process starts with talking with one of our assessors or independent financial advisors who will assess your situation and identify your key needs. We will work with you by negotiating lower rates with your creditors on your behalf, and consolidate your debt into your home mortgage.  

During this process our team will get you out of debt, remove flags or judgements on your name, and improve your credit score and switch you over to a traditional bank bond lender. We also put you through the Edvance foundational financial literacy program. The 12 month financial literacy program is aimed at equipping you with the knowledge needed to reach your financial goals, and to help you understand why you got into the first place, and how to never get into debt again.  

Is it Worth it? 

When you look at alternative options like high interest consolidation loans, our program has been proven to save clients money and equip them for a better financial future. Some of our clients are saving up to R7 000 a month by refinancing their debt into their home bond.  

While your home may be a great place for you to relax, recoup and make memories, it also has the ability to make your financial life easier, and remove you from debt review. Though refinancing may sound like a complicated task, it is made easy thanks to our dedicated team.  

Times can be tough. Be it COVID -19 related or not, surviving financially can lead to us taking out high interest, unsecured debt in order to fund our lifestyles. While at first this may seem harmless, it can quickly develop into a mountain of debt that can seem impossible to get out from under. But what then? What do you do if you can’t pay it back? One method many lenders use is to put you under debt review. But what is debt review? Is debt review the only option? 

What is Debt Review? 

Debt review is a formal procedure to help those who cannot afford to pay off their debt. It involves dealing with debt counsellors who will access your debt and deem you to be overly indebted.  

They will then work with you and your creditors to arrange a structured payment plan. 

While in this process, you will be heavily restricted on financial activity. For example, you will not be able to take out more loans, Credit Cards, Cell Phone Contracts, Internet Contracts, etc. This is due to the fact that the bank and service will view you as having too much debt, and will flag you as being under debt review with the credit bureaux. 

This level of restriction can limit your potential of reaching financial freedom. Many people under debt counselling and debt review have also complained about being treated like a number and not like a person. This leaves many people feeling stranded and wondering how they will ever get out of debt review. 

How to get out of Debt Review? 

The only way to get out of debt review is to pay off your debt and show yourself as being able to pay off what you owe. However, this can seem impossible when you are barely making ends meet as it is. But what if there was a better alternative? 

Our Bond Optimiser product has been specially designed to cater for people in your situation. Our team is ready to assist you in getting out of debt review and clearing any of the judgments against your name.  

We work to get you out of high interest debt and into a more affordable monthly repayment. Our surveys and studies have shown that our average customer saves R7 000 a month by using our service!  

We can help you in the following ways: 

• Getting out of high interest debt and switching to a more affordable option by using your  property and existing bond. 
• Clearing Judgements against your name 
• Getting you out of Debt Review 
• Get cash for important life events such as your child’s university, weddings, and unpredicted circumstances etc. 
• Settle your accounts in arrears. 
• Increase your monthly cash flow. 
• Become more financially savvy and financially independent. 
• Give you the personalised financial treatment you have been looking for. 

Bond Optimiser allows you to get back on your feet and live your life again. By using the positive value in your property, our team can work with you to use that value to consolidate your debt into your bond. This can lead to lower interest rates and a much more affordable monthly payment. 

How Home Bonds Work? 

Before you can understand how to refinance your debt into your home bond, you need to understand how a home bond works and the components that make it up.  

A home bond is a property backed loan that allows you to purchase a house without having the full capital required on hand. You often have to put down a deposit, industry average is 10%, and then there are strict affordability requirements to get approved. 

 There are three main components in a home bond: 

• Capital Owed – Capital owed is the amount of money you owe from your initial loan before interest and fees. If you were to take out a R1 000 000 bond, your capital owed would start at R1 000 000 and decrease from there. 
• Interest Owed – This amount is the amount of money you owe over time as interest. This amount will decrease as you make repayments and can decrease more if you make early or lump sum payments. If your bond has a variable interest rate, the interest owed can change with the interest rate changes. 
• Value Available – This is the amount of money you have paid off in your bond. If we use the R1 000 000 example, after a number of years you have paid the amount of capital owed down to R200 000. This means you value in your bond in R800 000. While this may not be directly available to you, it means that you owe less than your home is worth and have value available.  

Debt Review can sometimes feel like more of a mountain than being indebted. The lack of personal service and restrictive environment can make it difficult for you to thrive.  

However, this does not need to be the case thanks to Bond Optimiser’s Debt Repair program. Our team is ready to assist you by using your home bond to consolidate, reduce your debt and get you out of debt review. 

Is it Worth it? 

There are not many alternative options when you are in debt review. The only way of getting out of debt review is if you win the Lotto, or inherit enough money to pay off all your debts. The Bond Optimiser program has been proven to save clients money and equip them for a better financial future. Some of our clients are saving up to R7 000 a month by refinancing their debt into their home bond, and allowing them to be removed out of debt review.  

While your home may be a great place for you to relax, recoup and make memories, it also has the ability to make your financial life easier, and remove you from debt review. Though refinancing may sound like a complicated task, it is made easy thanks to our dedicated team.  

Creating a budget is the most important step you can make in improving your financial life. Having all your income and expenses in one place allows you to analyse and manage your finances. If you have no idea where your money is going, it is impossible to stay on top of your bills. 

We will help you understand why you need a budget, and how to create a budget with the steps below.

Why Do You Need a Budget?

The key to a successful financial life is being consistent, and lack of understanding can often lead you astray when it comes to a budget, this is why you need to create a budget to manage your personal finances. 

4 reasons you need a budget:

1. It helps you to keep your eye on the prize – we all have money goals. Whether it is to send your child to university or to pay off your house sooner. A budget allows you to keep your eye on that goal and stay on track to reaching it.
2. A budget allows you to curb your spending – sometimes we can spend too much. Having a budget helps you to avoid spending money you don’t have. 
3. It sheds light on bad habits – bad money habits can often go unnoticed until we shed light on them by having a budget. These bad habits can cost you a lot of money, having a budget can help you to identify these bad spending habits.
4. A budget helps you to prepare for emergencies – a budget helps you to plan ahead and stay in control so that when unexpected expenses/ emergencies arise; you know how to handle them in terms of your finances. 

How to Draw Up a Budget?

Getting started is the toughest part. For many of us, finances do not come easy, numbers confuse us, and this leads us to avoiding budgeting all together. However, this needn’t be with our step-by-step guide below:

Decide How Your Are Going to Record Your Budget

In the 21^st century we have many options for recording our budgets. You can use a budgeting app, a spreadsheet or even a budgeting diary. Find whichever medium that suits you and is easiest for you to do consistently. 

Gather Your Bank Statements and Cash Slips

The next step is to gather all of your spending and earning information. This includes bank statements, credit card statements, cash slips and any other statements you deem necessary for your monthly spending. You can also view a summary of your transactions on your banking app. Having this information together will make the next steps easier. 

Record All Your Income

Now that you have your medium and your financial information, it is time to start the budget. Step one is to record all your income for the month. This includes your salary, extra income, side hustle, rebates and allowances. 

Record All Your Fixed Expenses

The next step is to record all your fixed expenses. Fixed expenses can be described as expenses that stay the same month after month and do not vary. Examples of this are bond repayments, car repayments, insurance, school fees and medical aid. This can also include subscriptions and debit orders that run consistently. 

Create a section in your budget for these expenses as they are predictable.

Record All Your Variable Expenses

Step three is to create a section for your variable expenses. These expenses vary from month to month and are often made up of many purchases inside a budget category. This includes grocery spend, clothing, petrol, transport fees, electricity, water and eating out. This is the section where you can look for bad habits and overspending.

Allow a small category for miscellaneous or budget buffer. This is a small amount in your budget to help you in the event you overspend. This buffer will help you to avoid going into debt and if the buffer is not used, it can go towards your goals. 

Analyse Your Budget

Now that everything is recorded in your budget you finally have a bird’s eye view of what is going on in your financial life, identify areas where you may be overspending or areas where you could save some money. 

Set Goals

The last step is to set your goals. Now that you have drawn up and analysed your budget, you can finally start to set attainable financial goals. Do you want to grow your retirement savings? Start setting these goals and calculate how much you can contribute to these goals on a monthly basis. 

One goal many people forget to add is an emergency savings. We don’t know what will happen tomorrow so putting aside some money for emergencies is a great idea to give you peace of mind. 

With some dedication and consistency, you can improve your financial life through budgeting. Budgeting is one of the key principles we teach our clients in our 12 month foundation financial literacy course. It is part of our Bond Optimiser way to not only help you, but also to equip you for a better future. 

Short term loans are often made out to be the solution to your cash flow problems. While they may help boost your short term cash flow, are they the best decision over the long term?

Before you consider a short term loan, there are some factors that you need to consider.

Fees & Interest

Short term loans are considered very high risk. They are normally unsecured and ask for no collateral, making it risky from the lenders point of view. Because of this, lenders often charge high interest to compensate for the risk. While these rates are limited by the National Credit Regulator, the interest rate is still high and can make the repayments very expensive.

The maximum interest rate for a personal loan as set out by the NCR in 2007 is the Repo Rate + 21% per annum. The current repo rate is 3.5% making the maximum interest rate 24.5%. This is almost a quarter of your loan amount per year in interest.

While we often aim to pay the debt off fast, it is often not possible.

Can Encourage Unsustainable Spending Habits

When we take out a short-term loan, we have run out of money or have unforeseen expenses. When we have run out of money, taking out a loan can solve our immediate deficit, but it leads to more costs later on.

A better option would be to manage your finances better and avoid taking out debt. 

Can Limit Your Future Finances

Because of the high interest and fees charged by short term loans, it can restrict your monthly budget. Having to pay a large sum of money every month towards your debt gives you less money for other essentials.

How to Make My Debt Repayments More Affordable?

If you find yourself in a position where you are paying high interest and fees, and are restricted by your repayments, it may be time to look for help. Our Bond Optimiser team is ready to help you reduce your monthly repayments by refinancing your debt into your home mortgage. This can lead to lower interest, less fees and more savings on your monthly repayments. Our team can also work with you to help you become debt free.

Our clients also go through a 12-month foundation financial literacy course Edvance, aimed to help you manage your personal finances better in the future.

Debt can be one of two things, an enabler that gives you cash when you need it or another asset that adds value to your life. While long term debt can allow you to buy assets that can help you to create a better life, short term debt can land you a lot of high interest debt.

Interest can add a lot to your monthly repayments. The interest rate you pay has a large effect on your monthly repayments, thus lowering your interest rate can make your debt more affordable. Interest rates are based on risk , therefore you need to lower the risk to lower the rate. A bond or home mortgage is lower risk than an unsecured credit card or personal loan as it is backed by the property itself. This allows you to get a low interest rate on your home mortgage. A great way to make use of your low interest facility is to refinance your debt into your bond. This allows you to take advantage of the low interest rate and consolidate your debt into one easy repayment. 

How Home Mortgages Work?

Before you can understand how to refinance your debt into your home mortgage, you need to understand how a home mortgage works and the components that make it up. 

A home mortgage is a property backed loan that allows you to purchase a house without having the full capital required on hand. You often have to put down a deposit, industry average is 10%, and then there are strict affordability requirements to get approved. 

There are three main components in a home mortgage:

• Capital Owed – Capital owed is the amount of money you owe from your initial loan before interest and fees. If you were to take out a R1 000 000 bond, your capital owed would start at R1 000 000 and decrease from there.
• Interest Owed – This amount is the amount of money you owe over time as interest. This amount will decrease as you make repayments and can decrease more if you make early or lump sum payments. If your bond has a variable interest rate, the interest owed can change with the interest rate changes.
• Value Available – This is the amount of money you have paid off in your bond. If we use the R1 000 000 example, after a number of years you have paid the amount of capital owed down to R800 000. This means you value in your bond in R200 000. While this may not be directly available to you, it means that you owe less than your home is worth and have value available. 

How Refinancing Works?

When you refinance your home mortgage you are using the value available to pay off your other debts. Depending on how long you have had your home, you may be able to have it reassessed and get a bigger home mortgage. This is because property values usually increase over time. This will depend on other factors besides the value of your home, including your income, credit score, affordability and Loan to Value.

The process starts with talking with one of our assessors or independent financial advisors who will assess your situation and identify your key needs. We will work with you by negotiating lower rates with your creditors on your behalf, and consolidate your debt into your home mortgage. 

We put you through the Edvance foundational financial literacy program. The 12 month financial literacy program is aimed at equipping you with the knowledge needed to reach your financial goals, and to help you understand why you got into the first place, and how to never get into debt again. During this process our team will get you out of debt, remove flags or judgements on your name, and improve your credit score and switch you over to a traditional mortgage lender.

Is it Worth it?

When you look at alternative options like high interest consolidation loans, our system has been proven to save clients money and equip them for a better financial future. Some of our clients are saving up to R7 000 a month by refinancing their debt into their home mortgage. 

While your home may be a great place for you to relax, recoup and make memories, it also has the ability to make your financial life easier. Though refinancing may sound like a complicated task, it is made easy thanks to our dedicated team. 

Investing and not paying tax on your returns sounds too good to be true. However, using the Tax Free Savings Accounts (TFSA) allows you to invest without paying tax on any earnings, dividends or interest earned within the account. This system was introduced by the government in 2015 to encourage South Africans to save more by allowing them to save on tax. 

How do you take advantage of this initiative and how do you use a tax free savings account? Is a savings account right for you?

Maximise Your Benefit!

Each year, you are allowed to invest R36 000 in tax free savings accounts. More than that and you will be taxed on your savings contributions. There is also a lifetime limit of R500 000 per person. Try to contribute as much as you can, as early as possible to take advantage of the tax savings over time.

Maximising this benefit by contributing as much you can afford is vital to taking advantage of this savings opportunity.

Automate Your Contributions

Automating your contributions is the best way to remain consistent. Because you are limited to a specific amount of contributions per year, automating your contributions allows you to stay under this amount. 

Automating your tax free savings is easy! You can automate your savings by setting up debit orders or scheduled transfers into your tax free savings account. 

Think Long Term

The no tax environment really makes sense over the long term. These small savings over the short term can add up over 10 or 20 years of growth. In a tax free savings account you are limited to R500 000 in a lifetime, but when you reach this amount the money can continue to grow. 

It is important to take into account that when you have contributed money to your tax free savings account it adds to your lifetime limit. However, when you take money out of the account, you cannot add it back without using up more of your lifetime and yearly limits. 

As an example, if you added R10 000 to your tax free savings account, you could contribute another R490 000 over your lifetime or R26 000 for the year. If you take R5 000 out of the account, you can still only add another R490 000 and R26 000 for the year.

It is vital to think long term and not to withdraw your money prematurely. 

Debt is often one of the items that takes up a lot of your monthly budget giving you less to save. Our team at Bond Optimiser are dedicated to working with our clients to help them save up to R7 000 a month by consolidating their debt into their home mortgage. Speak to one of our assessors today. 

A credit score is often spoken about and used as a metric to judge the risk of our customers. This number can make a huge difference in your ability to negotiate credit and get better interest rates, but what is a credit score and what affects this number? 

Your credit score is designed to show you your credit history and the strength of your credit profile in a numerical form. 

What factors affect your credit score and how can you increase a credit score?

What Factors Make Up Your Credit Score?

In South Africa, the top two credit scoring agencies are TransUnion and Experian. While they can differ slightly in their scores and scoring methods, they both look at similar metrics. These metrics are used to produce your credit score. 

These are the four factors they look at:

Court Judgements and Defaults

A court judgment is when a court issues an instruction for you to pay your outstanding debt. This is often after a long period of the creditor trying to collect your debt from you. A judgement can stay on your credit report for five years. 

A default is when you fail to pay or fulfil a monthly debt commitment. This can negatively affect your credit report and your payment patterns. This stays on your credit report for 1-2 years depending on the score provider.

How Long You’ve Had Credit

The length of time you have had credit is a major factor in your credit report. Having a long credit record allows debt providers to better access your payment patterns and habits. This is why it is crucial to keep your accounts in good standing over the long run to build up a strong, healthy credit record which will lead to a great credit score.

How Much Debt You Have and How Much You Are Using

How much debt you have is another crucial piece of information on your credit profile that can affect your credit score. Debt providers in South Africa have to abide by strict regulations and guidelines set out by the National Credit Regulator. One of these regulations is to provide credit responsibly. How much debt you have proportionally to your income will affect how your credit profile looks to credit providers.

How much credit you are using, as compared to what you have available, is referred to as credit utilisation. For example, if you have a credit card with a limit of R10 000 and you are using R1000 of the R10 000 balance, your credit utilisation is 10%.

 The lower your credit utilisation the better. This is because using less credit than is available is linked with managing credit responsibly.

The Number of Credit Applications on your Profile

We all like to find the best deal, this leads us to shopping around and comparing different offers. Well, this is not the case with debt as multiple debt enquiries can look bad on your credit profile. A debt enquiry is when a debt provider requests your credit information when you apply for credit. This enquiry is logged on the system to allow other credit providers to see your recent applications.

Multiple applications over a short space of time are seen as erratic behaviour which leads to a lower credit score. 

How to Improve Your Credit Score in South Africa?

As with many things in life, prevention is better than fixing. So, working hard to keep your credit profile in good standing by paying your accounts on time and using credit responsibly. 

If you have found yourself in a situation where your credit score is low, hope is not lost! Our Bond Optimiser team has helped many people like you to consolidate your debt into an affordable repayment and to improve their credit scores. We do this through their 12-month program which includes an in house foundational financial literacy program through EdVance. This program is designed to give you the financial knowledge needed to achieve the financial freedom you have been dreaming of!

How to Check Your Credit Score?

Many of the credit regulators and credit scoring agencies advise checking your credit score at least once a year. This is to help combat fraudulent activity on your profile and to ensure you are keeping your credit healthy. There are several places you can check your credit score for free in South Africa. Here are some of the common places:

• TransUnion – TransUnion is one of the top credit scoring agencies in South Africa and allows South Africans to get a free credit report once per year.
• Experian – Experian is another one of South Africa’s top rating agencies. Experian similarly allows you to check your credit score once a year.
• Your Bank – Many banks offer a credit score or indicator for their users. While this is not a full report it can give you a good indicator of your progress.
• Bond Optimiser - We give free credit reports to our customers and applicants to help them stay informed.

While a credit score may seem like a confusing number, it is simple to understand when you break it down. It all comes down to how you have managed your credit in the past and how you are currently managing debt. 

Planning a personal budget can feel like a rather overwhelming task. It may feel like opening a Pandora’s box of debt, bad planning, failure, bad financial decisions, and overdue accounts, but the whole point of having a budget is to avoid experiencing these things.

A budget is not a set of rules, but rather a framework in which you spend your money. Knowing what you can afford to spend and where your money is going has been described as a rewarding and self-satisfying experience. But how do you budget? What are some good personal budget tips?

Set Yourself Goals

Ask yourself why you need a budget, knowing your why and your goals is a key step to drawing up and sticking to a budget. Is it because you want to get rid of debt, save for your retirement, or go on your dream holiday? Think of the financial goals you wish to achieve, and break these down into three categories:

·        Long Term Goals: What do you want to achieve in 5- or 10-years’ time? Start a family, send your children to university, or maybe start your own business?

·        Medium Term Goals: List 2 things which you would like to accomplish within the next year: Pay off your debt, start a new career, renovate your home?

·        Short Term Goals: Think of 1 thing which you would like to accomplish over the next month: Save a certain amount of money, not use your credit card or accounts for 30 days?

Setting yourself financial goals will help you track your success and allow you to celebrate your achievements as you follow your path to financial security.  Remember that these goals are not set in stone and can be reviewed or changed at any time, having goals is the most important thing.

Planning

You need to know where your money is going and having a budget will give you a roadmap of where and how you are spending. If you understand the reason as to why or where you might be overspending, then you can stop the cycle and keep your budget on track.

Begin by making a list of your income, and your expenses. Some of your expenses will be monthly (mortgage repayment, Groceries, School Fees), others may be annual (Car licenses, TV Licenses, etc) and need to be accounted for within each month’s budget (i.e., Portioned into 12 months, and saved for payment in the month they will be due). You could even open a separate savings account for the annual expenses so as not to be tempted to use the money in your current account.

Divide the above expenses into two categories: fixed (e.g., water, mortgage, school fees) and variable (e.g., groceries, petrol)

Prioritise your expenses starting with the most important ones like; bond, utilities, food, and transport, and work your way down the list.

Create a personalised spreadsheet, or simply use a budget diary. Do what works for you.

The first time you draw up a budget can be the most time consuming. The months after are merely about updating and recording new expenses.

Evaluate and Track Your Progress

Remember that every month is unique and different expenses can arise.  One may have many birthday celebrations, another may be at the beginning of the year when you have school expenses,or a holiday month.  You will need to make allowance for these by reviewing your budget regularly. Start monitoring your financial trends, cutting your spending, and trimming your budget if needed. 

Some Personal Budgeting Tips to consider

·       Things take time – give it time to work and show results. Give your budget a chance!

·        Do not compare yourself to others - All things are relative, and this applies to finances too.  Everyone has a different income and different expenses, so your budget is unique to you, so do what is right for you.

·        Consolidate your debt – our Bond Optimiser team has helped clients save up to R7000 a month on debt repayments. Talk to one of our friendly team members today to see if we can help you too.

If you want to change a habit, you need to know and understand the habit!  Knowledge is power, and the more you know about your expenses, your income and spending habits, the better you can plan for your future financial freedom and achieve peace of mind when it comes to your money. Plan and commit!

Saving is often something that we put off when it is a crucial part of building your wealth and financial freedom. Savings can be your safety net when unexpected expenses occur. 

How to get started? The first step is to set your savings goals. Having a savings goal that is aligned with your financial plan is crucial. Your savings goals could be anything from saving for a rainy day to saving for a holiday. 

Types of Savings Goals

The first step to step to setting any goals is to understand the type and timeline of the goal. This can help you with planning. Here are the three typical types of a savings goal:

• Short Term – These are savings that you will need to access in the near future. Short term savings goals usually have a horizon of six months to a year. This could be saving for a holiday.
• Medium Term – Medium-term goals are between 1 to 3 years. This could be saving for a new car. 
• Long Term – These are goals with a horizon of longer than five years. Examples include retirement, a bigger house, or to pay off debt. 

Where to Keep this Money?

Another confusing part of saving is where to put your savings. While a savings account at your bank may seem like a great option, it may not be the best place to earn interest that helps grow your money over time. 

The best way to identify the best place to put your savings is to talk to a financial advisor. Financial advisors can help you to draw up a financial plan that will align with your savings goal. 

However, if you are wanting to get right in, here are some potential ideas based on the timeline of your goal.

Short Term Goals

When it comes to saving for the short term you have two major factors to keep in mind. Firstly, you need to ensure the savings account is accessible within your timeline. Secondly, the savings account needs to be lower risk. 

Possible options include:

• Savings Account - A savings account is an interest bearing account offered by your bank.
• Money Market Account - A money market account is a type of cash investment that earns interest. 
• Cash-Based Unit Trust - Unit trusts that are classified as stable or that invest in cash. 

Medium-Term Goals

When you are saving towards a medium term goal, you need to think more about the return on the interest you will be earning. A few percent a year over a three year period can make a huge difference in the value of your savings or the time it takes you to reach your goal.. 

Potential savings accounts include:

• Multi-Asset Unit trusts - Multi Asset funds are investment funds that include multiple asset types such as Equity, Property, Cash and Bonds.
• Low-Risk Funds - Low risk funds are funds with a more stable return and less volatility. 
• Money Market Funds - A money market account is a type of cash investment that earns interest. 

Long Term Goals

The long term is always a difficult one to judge because a savings goal of 6 years is quite different to a savings goal of 40 years. It again comes down to analysing your needs and risk appetite.

If you are saving for the longer term, you could consider a little more risk depending on what the savings are for. This could mean introducing more equity into your portfolio. 

Possible options include:

• Managed Funds - Managed funds are actively managed and monitored by a professional fund manager. 
• Funds with a long-term focus - Funds with an investment horizon of 5+ years can suit your long term goals. 
• Multi-Asset Unit trusts - Multi Asset funds are investment funds that include multiple asset types such as Equity, Property, Cash and Bonds.

Speak to your financial advisor who can assist you in finding the best funds to suit your financial needs. 

While saving money may seem like a hard task, it becomes easier when you set clear and defined goals. Whether you are saving for a wedding or the holiday of a lifetime, set your savings goal to help you achieve it. 

Speak to one of our Bond Optimiser assessors today to see if we can help you to save on debt repayments.