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Six tips to financial wellness in 2020

29 Jan 2020

By Carlo Gil, Financial Adviser at Liberty

We've come to the end of Januworry. The month where the financial hangover from the festive season's overspending places pressure on thousands of South African households.

However, setting financial resolutions is a great way to make your money work better for you. It's never too late to implement the right habits to meet your resolutions in 2020.

Here are six tips to meeting your financial resolutions and ensuring you end 2020 far better than you started.

  1. The "B" word - Budgeting
  2. Proper budgeting halves the work done when it comes to achieving your financial resolutions. Budgets provide you with a clearer view on where your funds have potential to grow. It also helps you to identify and fix the pitfalls of your spending. Once you know where your money is going, you can plug the spending holes and redirect your money to savings and investments.

  3. Save yourself
  4. South Africans save a miniscule - 0.10 percent of their incomes – yet saving can enable you to reach your financial milestones sooner or afford to fund your next micro dream. When saving is done proactively, it works alongside your trusty budget. Every cent counts over the long-term. So even if you're saving very little of your monthly income, you're still putting yourself in a better financial situation.

  5. Hustle
  6. Thanks to the freelancing revolution, more flexible jobs exist now, plus many opportunities to earn money from hobbies and passions. Just be careful about how you supplement your 9 to 5.

    There are many secondary income-generating options now, but many are unprotected by law and industry best practices. So, protecting income has become just as important as earning more. Fortunately, you can insure your side hustle, thanks to Liberty’s Income Protector Enhancement.

  7. Emergency room
  8. Consumers operate in an unstable job market and the unexpected tends to happen - for example disability, critical illness, retrenchment and even death. You should protect your life and lifestyle and ensure that your loved ones feel the least impact in any of these scenarios.

    Enter the emergency fund. It’s easy to set up and every little bit helps. You can even involve your family, whether deposits to the fund jar comes as a punishment for not doing homework or from change saved on a shopping trip.

  9. Invest in yourself
  10. Investment can seem like a daunting saving method. Unsure of where to start? Speak to a financial adviser about whether it’s the best channel for reaching your financial resolutions and what products will work with your goals.

    Luckily, several technologies and innovations have simplified investing. For example, Liberty’s recently re-launched tax-free investment app, Stash, enables consumers to continuously contribute to and monitor their investments.

  11. Get un-debted
  12. A staggering nine million South Africans have bad credit records due to debt, according to the National Credit Regulator and the average SA household spends 72.6 percent of its disposable income on servicing debt.

    Thankfully, there are ways to manage your out-of-pocket debt and credit situation to save more. Paying your highest interest debt first saves on your total outgoing funds per month and having a little extra wiggle room for what you need, or for saving for your next important purchase. You’ll also be able to put those savings towards nixing other debt.

    Ultimately, there are many roads to financial happiness – and the best time to start the journey is now. Want to know more about reaching your financial resolutions? Speak to a Liberty financial adviser or your broker about great tools like our Lifestyle Protector with Disability or visit Liberty to find out more.

    This article does not constitute tax, legal, financial, regulatory, accounting, technical or other advice. The material has been created for information purpose only and does not contain any personal recommendations. While every care has been taken in preparing this material, no member of Liberty gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information presented. Please consult your financial adviser should you require advice of a financial nature and/or intermediary services. Liberty Group Limited is a Registered Long-Term Insurer and an Authorised Financial Services Provider (FAIS no 2409).

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