These days, you don’t need an alarm to wake you up. Financial stress does the trick.
The debit orders will wake you up and have you wondering how best to earn an extra income.
If not, a large chunk of your spare time is probably spent on coming up with new hustle ideas.
Rising interest rates, soaring inflation and sharp increases in the cost of fuel and food are increasingly having a massive impact on our wallets – and our general stress levels.
Experts have even found a clear link between our financial wellness and our mental health. When we are comfortable with our finances, we are free to focus on other areas of our lives, like our health, relationships, and personal growth. But financial stress drains our happiness and impacts our overall well-being, according to Melody Cloete, Training Specialist at Bidvest Life.
“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,” she says.
To achieve financial freedom and somewhat reduce the stress, Melody recommends asking yourself these questions.
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- 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 fall down. The secret to managing your money well is paying yourself first. This means saving a percentage of your income each month and then using what’s left to pay the bills. That way, you’ll have money available for life’s curveballs. Watch out for small expenses, like takeaway coffees and extra data to rewatch your favourite TikTok videos. There’s no need to forego these ‘spoils’ entirely but it’s important to be conscious of how you spend and be intentional when choosing to splurge. Knowing how much you spend, and on what, enables you to adjust your budget as you go, and rein in unnecessary habits or hidden costs.
- 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 costed you more every time the interest rate went 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 owing 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.
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- 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. According to Bidvest Life’s 2022 claims report, income protection claims accounted for 58% of Bidvest Life’s payouts in 2022 – more than for the rest of its portfolio combined. This shows the importance of insuring yourself against both minor and serious injuries and illnesses that could affect your ability to earn, which will, in turn, disrupt or even derail your financial stability. 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.
- 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 in 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.
