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Habits to ease your journey on the way to financial independence

02 Jul 2020

Financial literacy affords people with no formal financial background an understanding of financial planning. Having access to information about what is available, knowing who to talk to or where to go – it's more than just your academic qualifications. Financial literacy evolves," says Lindi Monyae, Executive: Emerging Consumer Market (ECM) at Liberty.

Monyae believes that such literacy is one of the most important tools to becoming more disciplined in your goal of reaching financial freedom – and that it is key as you make your journey "to the top". But what qualifies as "the top"? How do you decide when you've arrived there? Monyae acknowledges that this definition differs from person to person.

"It's dependent on their dreams, their future plans, visions, and if they believe they can reach it. For some, being on top is being debt-free. For others, it's having offshore investments and accounts. It might be paid-up residential and rental properties, or simply cash in the bank. For me, "the top" is and owing no one," she says.

To stick to her own financial goals, Monyae relies on her own experience in the sector, but also the advice she receives from her financial coaches, who provide a fresh opinion on whether her goals line up with her current circumstances. Each year, she re-evaluates these targets; that is why having a trusted financial adviser is so important as life can be unpredictable. There are some habits that apply to everyone at every stage in life and mastering these are a crucial aspect of good financial management such as:

  • Budgeting
    Budgeting gives people the tools to identify opportunities for wealth creation and eliminate any waste. Knowing exactly where your money goes is vital to financial freedom.

  • Eliminating debt
    "To eliminate debt, you have to be disciplined," says Monyae. Knowing who you owe and how long it will take to pay your debt are the first steps. Set goals for yourself with regards to small improvements and gains every month and you will quickly see the benefit of being disciplined."

  • Saving
    During times of crisis, liquidity is key. Monyae says short-term savings can help with cash liquidity or access to money when needed, as they're readily available when you have to bail yourself out of a potential crisis.

  • Retirement and post retirement plans
    "It is critical to plan, save and invest in our future years. We now live longer and remain active for longer," Monyae says. Planning for the future will give us the required financial freedom and peace of mind to enjoy our elder years while remaining active.

  • Insuring yourself and your assets against life's challenges
    Life is unpredictable and, for this reason, you need to protect yourself from accidents, damage to assets, illness, disability, loss of income, dread disease, and, ultimately, death. Monyae says that she wants to help ease the burden on her family as she becomes older, avoiding financial strain by planning for certain eventualities upfront.

"As soon as you start working, it is advisable to lay your financial foundation. A financial adviser can give you personalised and customised advice that is relevant to you and the stage of life you are in. This information serves as financial progression, monitoring and guidance."

*This article was first published by Financial Mail.


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Liberty Group Limited (Reg. no 1957/002788/06) is a licensed Insurer and an Authorised Financial Services Provider (no 2409).

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