Health fanatics will tell you what got them healthy and fit and what keeps them that way. It is consistency.
You have to keep exercising and eating healthy to stay in shape and build a stronger body.
The same goes for your savings.
You don’t save when you feel like it and hope that a miracle will happen. You will always get what you put into it.
We have to be consistent — in praying, exercising, making healthier food choices and with our savings.
Financial resilience is your ability absorb life’s financial shocks without losing your footing.
— Sharon Hamman, Momentum senior legal adviser
There are only seven months to go to December, which comes with a lot of expenses. However, if we start planning right at the beginning of the year and set targets for short and long-term savings, we will finish strong.
With living costs soaring, we constantly have to adapt to challenges and learn how to navigate difficult times.
It helps to learn not only how to budget but to also stick to it.
We need to relook how and where we do our shopping, allowing our rand to go a bit further and work for us.
“Financial resilience is a journey of small, consistent steps, allowing you to live with confidence, security, and — most importantly — the power to make life choices,” says Momentum senior legal adviser Sharon Hamman.
“When we live from paycheque to paycheque or lack a safety net, we are financially exposed, and freedom of choice is usually the first to suffer,” she says. “Financial insecurity is a lack of money but includes limiting someone’s financial independence, staying in a toxic work environment because you cannot afford a month without pay, staying in an abusive relationship as you cannot afford to live on your own, or losing the power to provide for your family’s future because of an unexpected medical bill.
“Financial resilience is your ability to absorb life’s financial shocks without losing your footing,” says Hamman. “Resilience is aligning your spending with what provides you and your family with long-term stability.”
She says it is important for people to reflect on their current position.
“Are your habits serving you, your independence and financial resilience, or are they holding you back, shielding you from the true freedom that financial peace of mind brings? By identifying and understanding your money personality and aligning your spending with long-term stability, you can move from spending to planning,” Hamman says.
“Peace of mind is knowing an unexpected expense won’t derail your entire month. Your first line of defence — to avoid going into debt when the unexpected happens — is a freedom [emergency] fund.
“Financial resilience requires protecting yourself against the ‘what ifs’ of life; a level of cover that ensures a crisis doesn’t become a poverty crisis. Disability, critical illness, or life cover are more than financial products — they are vital for laying the foundation for financial security, ensuring you and your family can live with dignity if you can no longer earn an income. The right level of cover ensures a health crisis doesn’t create a poverty crisis.”
Hamman says we should “navigate relationships with rands and sense”.
“Extended family obligations, loans, or shared household expenses can cause financial vulnerability. Setting healthy financial boundaries helps you build financial resilience; open communication about money with partners and family members protects your financial sanity,” she says.
“Every cent allocated towards a plan is an investment in your future freedom. By taking the time to regularly review your financial plan, you ensure you remain on course, fit for purpose, confirming your commitment to yourself and your loved ones.”
Duma Mxenge, head of business and market development at Satrix, says getting regular advice from a financial adviser is better than trying to do it alone.
“Consulting a financial adviser is the prudent approach,” Mxenge says. “It’s less about maximising your investment returns — although that is important — and more about having peace of mind that you’re on track to meet your financial goals. Research has found that 86% of advised clients reported greater peace of mind than those managing their own finances.
“In moments of market uncertainty, self-directed investors tend to panic and disinvest, whereas having an adviser gives you an additional layer of friction that prevents you from making a poor decision.”
Mxenge shares six questions to ask your adviser.
Does my investment strategy align with my financial goals?
Your investment strategy should serve your goals, not the other way around. To prevent misalignment, each part of your portfolio should clearly support a specific goal. Your short-term money should not be invested in volatile assets, and your money for long-term goals should not be invested too conservatively.
Is my portfolio well-balanced?
Balance does not mean a bit of everything. Balance means appropriate diversification. It’s about having exposure to different asset classes (cash, bonds, equities, property), across regions and sectors. Balance is also about getting your risk tolerance right. A portfolio that’s too aggressive, for example, may give you sleepless nights during a market downturn. Speaking of which…
What could go wrong and how should I be preparing for it?
It’s important to treat your meetings with your adviser as financial health checks. Just like you wouldn’t only see a doctor when something goes wrong, you shouldn’t only see your adviser when markets are turbulent.
What milestones are coming up?
Marriage, divorce, birth or adoption of a child, career change, promotion, job loss, starting or selling a business, receiving an inheritance, health changes…These life events can have a huge impact on your income and expenses, and they usually require adjustments to your investments, insurance, estate planning or tax strategy.
What should I do differently in the next 12 months?
Questions like this shift the conversation from hindsight to foresight. They also help clarify whether your adviser is thinking holistically about your financial life or narrowly about products and performance.
How did my portfolio perform?
Performance is a vital part of the picture, but it’s not the whole picture. Investing should be less about trying to chase market performance and more about staying aligned with your goals.
