JN bank executive urges middle-income earners to strive for financial freedomWednesday, April 21, 2021
Jamaica National (JN) banking executive Steve Distant has called on middle-income Jamaicans to work towards attaining financial freedom if they are serious about averting a life of hardship and poverty.
Distant, who is chief of the bank's non-branch retail sales division, while speaking at a recent teachers' conference, urged the nation's educators to develop and maintain good financial practices including saving, investing along with the practice of wise money management, as these he said will lead to better financial outcomes for individuals and their families.
“Save, no matter how much you are earning as it doesn't have to be a lump sum of money. You can start small and set aside some cash each month and raise the amount whenever you get a salary increase,” he said during the virtually held conference.
He explained the importance of budgeting using the 80-10-10 rule which teaches people to utilise 10 per cent of their salary for savings, 10 per cent for tithing/charity and the remaining 80 per cent to fund expenses.
He pointed to the benefits of investing, as being another critical component of financial freedom, which he said should be pursued after accumulating some savings.
“You can invest in mutual funds, which is a professionally managed investment fund and increase the amount over time. You can also purchase stocks and bonds. As a public sector worker, you can also receive special offers on loans, mortgages, and savings,” he said, indicating that a $5,000 credit receipt will be made towards any mutual fund if accounts are opened with the bank's sister company, JN Fund Managers.
Distant cited insurance saving as another important part of securing financial wellness. “Ensure that you have a good retirement plan to sustain you after you retire; a critical illness plan, in case you become ill and have to unexpectedly dole out large amounts of cash, which can affect your overall savings. It is also recommended to have life insurance as [this] is an excellent way to establish generational wealth in a family,” he stated.
He further implored participants to prioritise financial obligations by paying bills and loans on time and in full, noting that, “if you pay your light and water bill on time, you can receive a $250 discount each time, therefore, saving money. It may seem like a small amount of money, but it adds up. If you are saving $1,000 each month by paying your bills on time, at the end of the year, you would have saved $12,000.”
“In addition, contrary to popular belief, once you pay your credit card bill on time and in full, you will not need to pay any interest at all,” he continued.
Distant, in his presentation, reiterated the need to have discipline and set goals if one is to achieve financial stability. He also highlighted debt consolidation as an important tool to assist these persons with the management of their finances.
“If you have five debts at different places amounting to $100,000 per month, you can access a debt consolidation loan, which would combine the five loans into one payment, for $60,000 per month. You would then have an additional $40,000. Therefore, you could opt to save $20,000 more per month, and use the remaining $20,000 to live a better life,” he said.
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