Jamaican professionals are being warned not to allow the desire to maintain a certain social profile to ruin their personal financial development, says Nina Peters, business relationship and sales manager for JN Bank’s St James and Trelawny locations.
She was speaking to members of the Kiwanis Club of Rose Hall in St James recently.
Highlighting statistics from a poll conducted by the Medical Association of Jamaica last year among its membership, which indicated that a majority of practitioners were not prepared for retirement, Peters underscored that many professionals fall into the same financial difficulties during their golden years.
“You may want to enjoy a certain lifestyle, and in fact, it may be necessary for you to have a certain profile so that you can win clients, or be taken seriously in your profession. However, you need to be smart about it, so that you’re not spending funds unnecessarily just to keep up with the Joneses,” the sales manager cautioned Kiwanians.
Outlining how they could accumulate capital, she said that debt management has to be taken seriously, pointing out that some professionals borrow heavily to maintain a certain social profile.
“Service your debt and, where possible, try to negotiate to pay them off quickly and at lower interest rates,” she advised. “If you have debts at different institutions, try to consolidate them. You could benefit from a lower monthly payment and, possibly, a lower interest rate,” she said.
She added that credit cards must also be carefully managed.
Credit history monitoring is becoming more important for prospective borrowers in Jamaica, particularly with an increase in credit bureaux.
“Reduce the number of cards you have and transfer balances, where possible, to lower interest-yielding cards,” Peters said.
“You may even want to reduce the limit on your card to control your spending. Use your credit card wisely. It is a free loan, if you use it well. Repay your loan on time. Avoid the monthly interest, and don’t use it to spend on items that you would not have purchased if you only had cash.”
The JN Bank business relationship and sales manager said that professionals should seek to accumulate capital for investment. In addition to managing debt, she urged them to save, applying the 80/20 rule. The rule dictates that persons should save at least 10 per cent of their income; give 10 per cent to charity, the Church or to assist the needy; and use the remaining 80 per cent to finance their expenses.
She encouraged professionals to also improve their financial acumen by reading and consuming more personal finance content.
Peters also urged professionals to diversify their sources of income to acquire capital to invest. She said that beyond the primary sources of income, they should consider how they can earn from their talents and assets.
“Ask yourself what you can do to supplement your income. The people we all consider wealthy know that this is the key to success,” she said.