How to be financially fit
The first step in owning your future is to write down your life goals and create a savings and investment plan that supports those goals.
South Africans have been hard hit by two years of financial challenges and uncertainty and there’s no sign of this changing in 2022.
Covid-19 will most likely be around for a while yet.
That’s why it’s never been more important for South Africans to get their finances in order. Zanele Ntulini, chief marketing officer at life insurer FMI (a division of Bidvest Life Ltd), said there are four ways individuals and their families can secure their financial futures.
Start saving and investing early
The first step in owning your future is to write down your life goals and create a savings and investment plan that supports those goals. Start saving now, and your finances will thank you in the future. R100 every month in a retirement annuity from the age of 22 will give you R2.5-million by the time you reach 70. If you only start at 32, your investment will be R1.8-m less.
“It doesn’t matter how much you can afford. What’s important is to set achievable goals, remain consistent, persevere, and start today,” said Ntulini.
Protect your income
In these uncertain times, your income is your biggest asset. It’s what maintains your lifestyle and pays the bills. But 62% of South Africans will run out of money in only three months should they lose their income because of injury or illness.
“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 work because of an illness or injury,” said Ntulini.
Get a will
Having a will means you control how your assets are divided in the event of your death. If you don’t have a will, the state will decide.
In both circumstances, your bank accounts will be frozen, sometimes for years, until your estate is finalised, so it’s also essential to make provision for your family to have immediate access to money during this period. Also, estate tax needs to be paid, and all debts settled before your assets are distributed to your beneficiaries.
“Without adequate provisions, these costs will come out of your estate, which may mean your house is sold to cover these costs, leaving your dependents with less than you intended – or even destitute.
“That’s why you should out life insurance that pays out as a regular income to provide your dependents with the certainty that the household bills or your children’s education will be taken care of,” said Ntulini.
Speak to a financial adviser
It’s important to find a financial adviser who will partner with you on your financial journey and will guide you on achieving your financial goals with a sound savings and investment plan.
“Your financial adviser can help you choose the best options to suit your pocket and your needs, so that not only do you have the right life insurance in place, but you understand the fundamentals of how your coverage works and the surrounding terminology, such as waiting periods, benefit terms, premium patterns and claims criteria, for each product.
“Having a financial adviser to guide you through this process could mean the difference between qualifying for a claim or not when you need it,” said Ntulini.
