Steps to guide you towards better financial health

I recently started sharing my work around Sowetan Money on WhatsApp with the hope that people who read the articles will be inspired and work on their relationship with money.

I got so many questions from family, friends and colleagues, like: “I don’t have a lot of money, how do I even save?” and “How do I get started?”

So, I thought this week, I should take another look at financial wellness because this is where it all starts. Just like our health, our finances need to be taken good care of.

If you don’t save for anything – be it a graduation, wedding, deposit for your dream house or car – the sad and brutal truth is that you will wake up one day and realise you have nothing.

The impact of this is dire as some people then take out loans due to pressure.

Proper planning, setting and sticking to budgets can save you a lot of money.

Former financial adviser and Bidvest Life training specialist Melody Stander says: “Financial wellness isn’t just about having enough money or being debt-free. It’s about having a healthy relationship with money, being in control of your own financial destiny.”

Stander says to attain financial wellness, you need to start asking the right questions:

Can I set, and stick to, a budget?

Everyone can set a budget. There are numerous resources and apps available online to help you do exactly that. But sticking to it is a different matter – and this is where most individuals fail.

“You must make sure your budget is realistic, and then you have to keep revisiting it to make sure you stay on track,” says Stander.

Am I prioritising paying off my debt?

Debt is one of the biggest sources of money stress and poor financial wellbeing. If you have debt, it’s costing you more every time the interest rate goes up. Put every extra cent you can towards paying off your debts, starting with the most expensive debts first. If you can, pay more than the minimum balance owed each month, or you’ll end up paying more interest than you have to.

Have I prepared for the day I’m no longer here?

It’s a topic most consumers tend to avoid. But what happens if you die? Will your family and loved ones be able to continue meeting their monthly obligations, and living the lifestyle that you want for them? If the answer is “no”, it’s a problem that can be fixed. Start by taking out life insurance.

Be sure to consider a life income benefit, which instead of paying a lump sum to your beneficiaries (that comes with multiple complexities such as inflation and behavioural risks), pays out as a monthly income.

It’s efficient and easy to understand because it mimics the income stream you are trying to replace. Chat to a financial adviser if you’re unsure, they’re your best source of expert advice. And don’t forget to draw up a will so you’re in control of how your assets are divided in the event of your death.

Have I protected my income from life’s curveballs?

Your biggest risk right now isn’t dying, it’s sustaining an injury or illness that keeps you from working and earning an income.

“Ask yourself, if you can’t work, how long will you be able to meet your financial obligations? Income protection should be the number one priority for every working South African. It provides security when we need it the most. It pays all your other insurance, medical aid, household expenses and school fees when you can’t earn,” says Stander.

Do I have a financial adviser?

A financial adviser is one of the most valuable allies you can have. They will walk your financial journey with you and guide you on achieving your financial goals with a sound savings and investment plan.

“Financial advisers help you choose the best options to suit your pocket and your needs. They make sure you have the right investments to meet your goals, and the right insurance to protect you and your loved ones. I can’t imagine my financial life without my adviser,” says Stander.

mashabas@sowetan.co.za