MONEY September 2022 IOL THE SPRING ISSUE
FEATURES 15 power tips for spring cleaning your finances 4 Get a handle on your debt 6 A guide to post-pandemic estate planning 8 Spring back on track towards your financial goals 14 REGULARS Rands and Sense with Lizo Mnguni 10 Fact File: Consumer confidence index 11 Money Basics with Martin Hesse What’s a ‘budget' and how will it improve your life? 12 Important contacts & links 16 2
CONTENTS
Martin Hesse
Spring cleaning doesn't have to be a dreaded list of chores. It can be a rewarding experience that helps provide some structure and organisation in your life.
Martin martin.hesse@inl.co.zaHesse
FROM THE EDITOR
@PERSONALFINANCE
Charl charl.reineke@inl.co.zaReineke
PRODUCTION
Vasantha vasantha@africannewsagency.comAngamuthu
MONEY EDITOR
SALES
Keshni keshni.odayan@inl.co.zaOdayan
PETER WALSH professional organizer and media personality
INQUIRIES
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DESIGN
BUSINESS DEVELOPMENT
Mallory mallory.munien@inl.co.zaMunien
hello@africannewsagency.com
As he was growing up, once a year or so, to stem the clutter, Sebastian’s room was subjected to a thorough overhaul. Containers of accumulated playthings and bits of playthings were emptied onto the floor, and anything that was broken, served no useful purpose or had been outgrown was either chucked out or earmarked for our charity shop up the road. It was an effort, but the end result was satisfying, and Sebastian’s attention would be diverted to toys he’d forgotten he had. Your finances need the same treatment. It’s laborious and may seem overwhelming, but it’s necessary to re-establish your financial position. Ideally, if you maintain a budget, it’s done so regularly that it’s routine. Dust off those insurance policies; scrutinise your bank statements, checking on debit orders; relook your medical expenses in relation to your medical cover; check that you are on track with your retirement savings; review your will. The satisfaction of having your house in order will add to your enjoyment of the spring.
CONTACTPUBLISHERUS
My son Sebastian, who turns 12 this month, has been spoiled for toys over the years. These have ranged from large items such as bicycles, cricket sets and an XBox to a seemingly infinite assortment of small plastic objects from various sources … and don’t get me started on Lego, which has infiltrated every corner of the house and garden. (Where on Earth, literally, do all these little bits of plastic end up? Considering the amount of plastic generated by a single family, it’s not surprising that there’ll soon be more plastic in the oceans than fish.)
Renata renata.ford@inl.co.zaFord
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The impact of Covid-19,increasing fuel, electricityand commodity prices haveseen many South Africanshaving too much month leftat the end of their money.According to TransUnion’sConsumer Pulse Index, manyconsumers are defaultingon accounts, digging intosavings and borrowing fromfriends and family to makeends“Whethermeet. you’re in afinancial pickle or not, springoffers a great opportunity fora financial change of season– adopting a more calculatedapproach to managingyour money, borrowing,budgeting, settling debt andsaving,” says Susan Steward,spokesperson for Budget Insurance.BudgetInsurance offers thefollowing tips:
5. Revise spending.your Are there waysto improve your spendinghabits behind the trolley,in banking fees, behindthe wheel, at the dinner table, on your utility billor subscriptions? Buyinga less expensive brand,shopping for specials, savinga couple of rands per tankor racking up those savingswith a loyalty card may seeminsignificant, but over just a
15 POWER TIPS FOR
see you wasting hundreds,perhaps even thousands ofrands.
1. Start NOW. Puttingyour financial spring cleanoff until tomorrow, then next week and next month could
SPRING CLEANING YOUR FINANCES
2. Go through your filesand clear the clutter. You should be filing all yourpayslips, invoices, receiptsand tax certificates so that you have them handy whenyou are doing your taxreturns each year – it couldhelp you to get some moneyback. SARS requires youto keep these documentson file for a period of fiveyears after the return is filed.That said, get rid of olderdocuments that you don’tneed any longer.
3. Create, maintain and revise your budget. In a recent survey conductedby Budget Insurance and1 Family 1 Stockpile, a350 000 member strongFacebook group,a third ofrespondents said they don’tsave money because theydon’t stick to a budget. If
you don’t have a monthlybudget plan, now’s the time to start one.
4. Cut, but be careful. It’s a good idea to cut non-essential expenses first, butbe mindful. When moneyis tight there are certainexpenses you may betempted to cut, like insurancepremiums on your vehicleand home. This could bringshort-term relief but may endup costing you far more inthe long run.
your savings. Could you bespending less or earningmore? Research what other banks offer and look at other ways to invest your money.Also look at what rewards programmes are on offer, andtake advantage of them.
13. Explore other income streams. Turning your hobbyinto a side hustle, or helpinga friend to market a business for a commission, for example,could supplement your income.
8. Avoid buying oncredit. Reduce the number of credit cards you carry andpay with your debit card orin cash if possible. Never buyfood or other necessities on credit or use one credit card to pay your debt on anotherone. Avoid taking higher creditlimits, as they’ll tempt you tospendAvoidmore.instant gratification
“Just like your home benefitsfrom an annual spring clean,with a fresh look and less clutter, your wallet and yourbank account can also reapthe benefits of an annual financial spring clean,”Steward says.
10. Get your emergencyfund started or boost it. With the constant threat of events like lockdowns and joblosses, it’s recommended that you have three to six months’worth of expenses saved up inan emergency fund. Start bysaving a small amount eachmonth. And don’t withdraw anything from this fund unless it’s a crisis.
pressure – rather save up cashto buy what you want.
11. The 10% saving goal and the 30-day rule.Saving each month is hard,but you should make it apriority. The rule of thumb is totry to save 10% of your salary.And if you’re consideringa luxury purchase, wait 30days before deciding whetherit is really worth it. Impulsivebuying is one of the majorfactors that contribute towards debt.
6. Stockpile goods. You can save a substantial amount by looking out for and takingadvantage of discounts andspecials. By buying more, at alower price, you’ll be able tostretch your rand and shrinkyour monthly shopping bill.
9. Don’t spend what you save. Going through theeffort of saving only to spendthat money on non-essentialsdefeats the purpose. Ratheruse that money to settle yourdebt.
12. Bank and invest wisely. Check your bankfees carefully and look atthe interest you earn on
15. Reward yourself, motivate yourself. If yourgoal was to save enoughmoney to go on a holiday,then go ahead and enjoy thatwell-deserved break. It’s a good idea to set a budget foryour trip to avoid subsequentpost-holiday debt.
7. Review your insurance. Not all insurers automatically revise yourinsurance premium eachyear, aside from an annualescalation. However, if yourcar is insured for market value and the value has depreciated,your premium should go down tooOn home contents insurance, check yourinventory to make sure thatall unnecessary items areremoved. Also don’t be set on sticking with one insurer –shop around.
14. Stick to your goals,but be flexible. Your budget and savings goals canbe affected by events out ofyour control, like unexpectedexpenses. Revise themaccordingly.
5 few months you could savethousands.
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As fundamental as money is to our livelihoods, it is one of the least understood and poorly managed essential commodities. Millions of South Africans find themselves struggling with bad debt, have a poor grasp of their spending habits, and don’t actively monitor their credit profile with a view to improving it.
GET A HANDLE ON YOUR DEBT
● Get a handle on your spending habits. Take a good look at your spending habits and avoid those that lead you into unnecessary and impulsive spending traps. Budget consistently and stay on budget. If you are in a financial bind, it’s important to cut the consumption traps that only get you into further bad debt – like impulse buys on your credit card.
● If you are facing payment difficulties, engage! If you are facing real difficulties with paying your debts, proactively approach and negotiate with creditors and lenders upfront. If contacted by a collections agent, explain your situation so they can work with you to find a solution. Different types of debt have different options – you might be able to temporarily suspend payments or lower your monthly repayments or interest rates by reaching an agreement with the lender. But don’t ignore calls from creditors or collections agents in the hope your problems will go away – they won’t! A lack of any response from you will result in legal action, which is imminently more challenging and negatively impacts your credit rating and future personal financial health – something that is very challenging to rectify once impaired.
A crucial part of maintaining your positive credit score is to ensure that all debt repayments and instalments are paid on or before their due date, every time, and at the very least that the minimum payment is made. Late payments will flag and impact your creditworthiness and terms with your credit provider. Set payment reminders if you need to, but don’t miss the payment dates.
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● Always make your debt repayments on time.
“Spring is the season of fresh starts, so use the opportunity to make a clean break and prioritise your financial and debt management with a view to making your money and credit work much harder for you,” says Tej Desai, chief executive officer of Alefbet Collections & Recoveries, a group of collections firms that includes Shapiro Shaik Defries and Associations, Metro Revenue Collect and ITC Business Administrators.“Themostimportant starting point is a plan. Get a clear view of all your debt and credit arrangements, know what your financial commitments are, your savings, your spending habits and how much you are paying to service your debt. Also map out your savings alongside your future plans and check whether you are on track to meet your goals. It’s important to revisit your financial plan regularly and update your progress along with your financial commitments and credit arrangements.”
big-ticket items – think buying a home or car. The better your credit score, the lower your debt repayments will be as you’ll qualify for the best possible terms and interest rate due to your lower risk to the credit provider.
Here are Desai’s top tips for cleaning up your credit management and approach to debt:
can provide a legitimate leg up in life – think buying a home or car (within your means) or a student loan to further your education and employability. “Bad” debt serves to increase consumption and gets you further into debt – think buying groceries and impulse-buys on your credit card, entertainment and eating out, and clothing.
High inflation, rising interest rates and a much higher cost of living are amplifying the strain that many households are experiencing. The time to grab the debt bull by the horns and put a plan in place to manage your recovery is now!
● Pay off your expensive debt faster. Debt and credit come with interest, which means that the longer you take to pay your debt down, the more you will pay. Rising interest rates mean that your monthly repayments will increase if linked to a variable interest rate.
If you can, increase the amount you pay back each month, starting with the debt that has the highest interest rate. As you pay off one debt or credit arrangement, divert the money you were paying to pay off your next debt. When you are finally done, put the money you were spending on debt repayments into a tax-free savings account or investment to provide you with an emergency fund.
● There is good and bad debt – know the difference. Be circumspect about the type of debt you are prepared to enter into. Remember that “good” debt
● Know your credit score. Many banks offer credit score health checks as a free service on their banking apps, or you can make use of a credit bureau for a free credit check. Your credit score is important, as it determines what loans you can get and the interest rates that you will pay, especially on
This phenomenon is not inherent to South Africa alone. A survey conducted for LegalZoom. com found that 32% of young Americans aged between 18 and 34 cited Covid-19 as the main reason they had a will drafted, specifically because they, or someone they knew, contracted theEstatevirus. planning – be it through a will, legal document, or other end-of-life considerations –needs more consideration when minors are involved. In these cases, parents must navigate several complex and emotionally
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In 2021, the Master’s Office, which oversees the administration of estates of deceased and insolvent individuals, estimated that about
70% of working South Africans did not have a will in place. However, as the pandemic progressed, subsequent studies found that there was an upsurge in people either drafting their wills for the first time, or updating the ones they already had.Significantly, a large portion of first-time estate planners came from lower income groups, indicating that South Africans across the economic spectrum are better considering their financial legacies and the heirs of such.
A GUIDE TO ESTATEPOST-PANDEMICPLANNING
Faeeza Khan says the pandemic made many people realise the importance of having a well-drafted, valid will.
Estate planning has emerged as a priority for South African households since the onset of the Covid-19 pandemic. Be it because of the tragic loss of life or the significant economic fallout, the pandemic brought to the forefront the daunting –yet necessary – conversation of estate planning as a means to ensure the future financial welfare of the next generation.
● Life insurance is often used as a tool to provide a cash injection into an estate to assist with estate expenses, liabilities, taxes and to leave enough money for a trust to
9 sensitive issues when choosing trustees and guardians to safekeep the child's inheritance until their age of majority, at 18 years old.Any inheritance designated for children should be placed in a testamentary trust in terms of the will, which is not only the instrument that creates the trust but also allows you to nominate trustees.Thetrustees will then administer and control your inheritance on behalf of the minor child. It should be noted that a life policy also allows for a certain amount of money to be designated for a child's monthly maintenance needs (including for education). It is important that these policy proceeds are paid into the testamentary trust for safeguarding.Therearea few considerations you should heed when estate planning, especially when a minor is involved:
maintain and leave a legacy for the minor children.
● A testamentary trust as part of a will is non-negotiable if there are minor children. In the absence of a testamentary trust, any inheritance that accrues to a minor child runs the risk of being liquidated or converted to cash and held in the Guardian's Fund. The guardian of the child would then have to claim maintenance from the Guardian's Fund to assist with the financial support of the child.
Khan is senior specialist for legal marketing at Liberty.
● Take time to choose trustees and guardians, and time to understand your child’s present and future needs. It is also important to decide how assets should be divided should more than one child be involved.
● Many people make the mistake of trying to “rule from the grave”, which complicates the will and makes it difficult to execute. The will should be simple and understandable.
If you die without a will, the Intestate Succession Act takes effect. Only blood relatives and spouses may inherit from the estate. Foster children, stepchildren, foster parents, step-parents, and possibly your partner, will therefore most likely be divorce.aschangeeachremainsanshouldaimplementtheadviserdaunting,processaccordingensuresdistresspreventupdated,Havingexcluded.awell-drafted,andvalidwillcanunduechallengesandafteryourpassingandassetsareallocatedtoyourwishes.Themayinitiallyseembutasoundfinancialisbestplacedtodetailmostefficientoptionsandalegalplantoensurechild'scontinuedwellbeing,theworstoccur.Oncethekeydocumentsforestateplanareinplace,itimportanttoreviewthemyearorwheneveramajorinthefamilyoccurs,suchabirth,death,marriage,or
● Make sure there is enough liquidity in the estate to cover taxes and expenses in the event of death. Many people leave assets such as holiday homes to their children without understanding that if they can’t pay the taxes or debts, the assets will have to be sold.
1. Review your existing policies. Reviewing your policies is one way to fight the rising inflation cycle, as it means you are empowered to understand inclusions, exclusions, claim processes, excesses, and how premiums work. The onus rests with you, the policyholder, to make sure you are insured for the right amount. Although your non-life insurance policy is automatically renewed annually, it is essential to confirm that you are insured for the right amount. This is because when your insurer calculates your premium, it’s based on several underlying factors, including market trends and movements, that influence the cost of insurance.
3. Make sure your vehicle is insured correctly. If the value of your vehicle does not accurately reflect the correct market value, you may need to consider top-up products. This will ensure you are not out of pocket when you claim. In addition, given that motor vehicle repairs are taking longer, it is important to expect delays. Car rental benefits are common in motor insurance policies to cover transportation while a vehicle is in for repair. As a result of extended vehicle repair times, it may be a good idea to increase the duration of car hire on these benefits.
It is thus even more important to review existing policies, keep appropriate insurance cover in place, or adjust cover where necessary. Spring is an opportune time for households to review their basket of non-life insurance cover.Here are some tips on how to “spring-clean” your policies:
Mnguni is manager of optimisation at Old Mutual Insure.
Lizo Mnguni
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Rands
The value of one’s home contents increases as the years go by and could now cost two or three times as much to replace. The cost of building a home has risen by 11% over the last 12 months, which means that the sum insured on your building cover also needs to be lifted.
and Sense
HOW TO SPRING CLEAN INSURANCEYOURPOLICIES
4. Speak to your broker or insurer. Some insurers are responding to these extraordinary times by providing innovative solutions. Discuss some of the issues in the market with your broker, who can help to ensure you have adequate coverage.
With spring in the air, it is crucial for you to go through your insurance policies to make sure you are adequately covered. Unprecedented events have resulted in trends being bucked, which means that many consumers are finding that they are not adequately insured. Unfortunately, this is being discovered when it is too late, at claimOnestage.event that has left policyholders either out of pocket or without benefits is an increase in vehicle values, driven by new vehicle shortages, parts shortages, computer chip issues, and shipping issues.
2. If you have made changes to your home or contents, update your
cover. It is important to update your insurer about any major changes to your property – such as home renovations or the addition of inverters or solar power to avoid loadshedding – to avoid any disappointments when an incident occurs that requires you to claim. In addition, carefully and regularly updating your household inventory provides an opportunity to update your cover and risk requirements.
FACT FILE 11
The FNB/Bureau of Economic Research Consumer Confidence Index (CCI), published quarterly, is a good indicator of how consumers are coping with respect to our economy.
The highlights of the 3rd-quarter report are as follows:
and cutting back on discretionary (“nice-to-haves”).spending
● Household debt and debt repayment costs as a ratio of disposable income remained relatively low compared with the first quarter of the year. However, the anticipated interest rate hikes in September and November are expected to push up debt repayment costs for consumers.
● Low-income households are showing signs of being more optimistic than medium- and high-income households. This may be because of government support for higher-incomearehigherhouseholds,lower-incomewhilemortgageratesnegativelyaffectinghouseholds.
In spring cleaning our finances this year, it’s important to be aware of the state of the South African economy, in order to plan ahead. For example, if, as is expected, interest rates rise, your debt repayments will rise too, so it would be advisable not to take on more debt and reduce your existing debt if possible.
“We expect structurally high compilersslowhouseholdwesentiment.negativelypriceratesincreasehigherunemployment,inflation,afurtherininterestandlowerassetinflationtoweighonconsumerConsequently,expectgrowthinconsumptiontonextyear,”saytheofthereport.
● The high inflation and interest rate environment is eroding households’ disposable income, requiring consumers to
● Year-to-date retail trade figures indicate that consumers are in “necessity mode”
● The CCI outcome remains weak, suggesting a negative outlook for consumption expenditure in the coming quarters.
CONSUMERS AND THE ECONOMY
● The number of jobs created for semi-skilled and non-skilled workers during the last three quarters grew by 1.9%. This has had a positive impact on income of lowincome households and boosted their confidence levels.
● The CCI recovered slightly from -25 to -20 points in the third quarter of 2022. The sub-index for expected economic performance recovered from -39 to -31; the subindex measuring how suitable consumers felt the current time was to buy durable goods rose from -32 to -28; while the sub-index measuring households’ confidence in their expected finances remained at -2.
spend a larger portion of their disposable income on non-durable goods (such as food and fuel) as opposed to durable goods (such as furniture and cars).
If money flows out of your bank account without you knowing where it’s going, if you regularly run out of money before you run out of month, and if you seem to be stuck in an endless cycle of financial ups and downs with no progress in sight, there’s one thing you need: a budget.
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● Set financial goals that will get you out of the rut you’re in and on the road to a more secure financial future.
It means being disciplined
● Reallocate money towards higher-priority items, such as debt repayments; and
MONEYwithBASICSMARTIN HESSE
Your personal or household budget is a tool that tracks your monthly income and expenses.
● Keep tabs on your spending habits, checking where you are spending excessively;
WHAT’S A ‘BUDGET' AND HOW WILL IT IMPROVE YOUR LIFE?
● Ensure that you are not spending more than you earn;
and setting aside a few hours each month to do some admin work, but it’s worth it. By getting a grip on what is coming in and going out, you can:
The rest of the table should reflect your expenses, grouped into categories. First, list all your fixed expenses. These are expenses that don’t change and you pay regularly each month, possibly by debit order. They include accommodation (rent or bond repayments), repayments on your car loan, municipal rates, insurance premiums, cellphone contract, internet streaming and security contracts. This is where you would also include regular monthly amounts towards savings or investments.
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A budget only works if you are honest with yourself about your income and expenses. It may show you, for example, that you are spending excessively on nice-to-haves such as fancy foods or designer clothes while falling into arrears on municipal bills or debt Ultimately,repayments.yourbudget
is about achieving balance: balance between what is coming in and what is going out, balance between wants and needs, and balance between short-term and long-term goals.
Monthly worksheet
Your biggest expense is likely to be accommodation: either your rent or home loan payments.Ideally, this should account for not more than 30% of your monthlyTransportation,expenditure.food, and other necessities should account for 40% (including your monthly vehicle repayments, which shouldn’t be much more than 10% of your income). Of the remaining 30%, at least 10% should go to savings, and the rest you can allocate to your “wants”: entertainment, hobbies, holidays, and luxuries.
Be honest with yourself
(such as your cellphone contract, DStv subscription, garden service, entertainment, and gym contract). This makes it easier to know where to start cutting back.
Your budget should take the form of a monthly worksheet or table. You can do it on paper, on a spreadsheet application on your computer, or by using one of the many budgeting apps now available online. Essentially, there should be three columns: line item, budgeted amount, and actual amount.
Well-proportioned
Instead of viewing a budget as restrictive, preventing you from enjoying your money, you can view it as a means to achieving your goals.
Ideally it should compare the amounts you have allocated towards various expenses with what you actually spend.
Finally, you need to list your variable expenses: those expenses that change from month to month: transportation (taxi fares, petrol, parking), food and groceries, electricity and water, clothing, personal care, home maintenance, and entertainment.Thenyouneed to go through your bank statements and shopping receipts, to populate the column of actual expenditure against each line item. This can be time-consuming, especially when categorising supermarket purchases.Onceyou have a record of what you actually spent in a month in the different categories, you can get an idea of where you could be cutting back or spending more. This “ideal” allocation will form your budget column, to which you can try to adjust your spending in the months ahead. Don’t forget, your budget column is not cast in stone. But it should guide your spending going forward.Youcould also group your expenses into necessary expenses (such as accommodation, food, clothes and transportation) and discretionary expenses, which you could, at a push, do without
The first few lines should be devoted to your income: your net monthly salary, any additional income you receive from bonuses, commissions or side hustles, and any income from investments such as interest on a fixed deposit or rental on a property.
Each individual is different, and our needs are different. But here are a few guidelines, gleaned from finance experts.
Spending on luxuries for yourself is okay, and should be written into your budget, as long as this is in proportion with what you spend on essentials and put away in savings.
Importantly, debt repayments (excluding your mortgage bond but including vehicle finance, personal loans, credit cards and store accounts) should not make up more than 20% of your total expenses. If they do, you are in danger of becoming overindebted. Reducing debt should always be a priority in your budget.
SPRING BACK ON TRACK TOWARDS YOUR FINANCIAL GOALS
So what did I do right this time around? My wish was to sustain this plant and see it flower time and time again. I knew my weaknesses (forgetfulness, loss of interest) and had a plan to counter this. My system helped me do what I needed to do, even when I didn’t feel like it.
Having a laudable goal is one thing, but achieving it requires an action plan and consistent hard work, writes Palesa Dube
Maintaining control of how much money you are spending and more importantly, how much you are able to keep at the end of any given month, is the real key to building wealth over time. If you earnestly drafted a budget as part of your resolutions at the beginning of the year, now is a great time to assess how you’re faring and make changes where needed. Also have an honest conversation with yourself about areas where you’re not getting it right to assess whether you need to change the goal or if a behavioural adjustment is required.Theaim is to spend within your budget as well as have enough to contribute to longterm investments as well as an emergency fund. The easiest way
I was given a beautiful orchid for my birthday last year. Now, I love pot plants as much as the next person, but I unfortunately have not had much success with this particular species in the past. Put plainly, I’d say my home is where orchids come to die, or so I believed.Tomysheer delight, this particular plant seems to have bucked the trend. The plant arrived with beautiful white flowers that wilted after a few months. I kept the plant in the same spot, remembering to water it as the occasion called for it. For months it looked like I was just nursing the leaves, when in the middle of winter I saw some buds starting to grow again. Lo and behold, true to its own timing, nature had done it again.Asif in perfect synchronicity
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I couldn’t help but draw an analogy on how we can use the same principles to tend to our financial goals. First, identify the goal but have a plan to deal with what might get in the way of you achieving it. Second, automate a system that will help you achieve your goal. Last, be consistent even when the going gets tough.
Here are a few considerations to tackle over the spring months:
and just in time for spring, I’m now spoiled with a beautiful bloom of orchid flowers again.
September: Revisit your budget
● After working for 30 years: 10 x your annual salary
● After working for 20 years: 5 x your annual salary
● As a habit, allocate a part of your annual bonus towards your retirement fund.
November: Get your retirement savings back on track
If you are in the fortunate position to be employed with great company benefits, take it upon yourself this month to fully understand what the scheme offers you. Often your scheme may have benefits such as a retirement fund and group-risk life and disability cover. There may be the additional benefits of an employee assistance programme, such as counselling and emotional wellbeing services, legal services, debt assistance and advisory services.
● Short-term insurance to assess if it is still required and if the premiums are competitive.
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● Use your upcoming salary increase to augment your monthly retirement contribution.
At this time of the year you are hopefully looking forward to an annual or Christmas bonus. It’s also around this time that you would be having conversations on salary adjustments. While it's good to spoil ourselves sometimes, do leave room to ensure that you are well provided for in the future too.
The primary query we get from clients is whether they are on track to providing for their retirement. We advocate that you aim to provide for a retirement income of 75% of your current salary, adjusted for inflation over time. The expectation is that you should have settled all major debt such as your home loan and that your children should be self-
If you do find that you are off track, there are a few levers you can pull:
We often find that individuals take on additional insurance privately while unaware of the benefits already available to them through an employee benefit scheme.Start by accessing or requesting your benefit statement through your employee benefit portal or speaking to HR to understand what’s on offer. It's then a good idea to consult with a financial planner to help you ascertain the levels of cover you need and whether you are on track with your retirement funding goals.
October: Understand your employee benefits better
● Your debit orders and subscriptions and cancel what you don’t use or need.
● After working for 10 years: 2 x your annual salary
● Understand the underlying investment options in your retirement fund and consult with a financial planner if necessary to ascertain the appropriate asset allocation to help better grow your retirement savings.
● Your debt, recommitting to paying off unnecessary and expensive debt quicker.
Dube, CFP, is a Director and Wealth Manager at Wealth Creed. She is a practicing member of the Financial Planning Institute of Southern Africa.
All of our circumstances are different and so it’s well worth your while to consult a Certified Financial Planner (CFP) so that a more bespoke plan can be calculated and put in place for you.
The advantage of pooling retirement and insurance products in a group scheme is that better terms and conditions can be offered, including reduced costs, largely due to economies of scale.
It may be cheaper to access these benefits through an employee scheme than in your personal capacity.
sufficient when you retire. If you are to achieve this, here is a rule of thumb to use to assess how you’re doing so far.
● After working for 40 years: 17 x your annual salary
is to build a monthly contribution to such a fund into your budget. In fact, make it the first line item. While you’re in your budget revisit these line items as well:
Financial Sector Conduct Authority MyMoney Learning https://www.fscamymoney.co.zaSeries
Pension Funds Adjudicator ShareCall: 0860 662 837 or phone: 012 346 1738 Email:www.pfa.org.zaenquiries@pfa.org.za
INVESTMENTS
Email:Financialsecretariat@fisa.net.zawww.fisa.net.zaPlanningInstituteofSouthAfrica(FPI)Phone:0114706000Email:info@fpi.co.zawww.fpi.co.zaSouthAfricanInstituteofTaxProfessionals(SAIT)Phone:0129410400Email:info@thesait.org.zawww.thesait.org.za
Ombudsman for Long-term Insurance ShareCall 0860 103 236 or phone: 021 657 5000 Email:www.ombud.co.zainfo@ombud.co.za
TAX Tax Ombud
For the latest financial market indicators, go to report/market-indicatorshttps://www.iol.co.za/business-
PROFESSIONAL ORGANISATIONS
Email: complaints@taxombud.gov.zawww.taxombud.gov.za
Financial Sector Conduct Authority ShareCall 0800 110 443 or 0800 202 087 www.fsca.co.zainfo@fsca.co.za
RETIREMENT FUNDS
Ombudsman for Short-term Insurance ShareCall 0860 726 890 or phone: 011 726 8900 Email:www.osti.co.zainfo@osti.co.za
Council for Medical Schemes MaxiCall: 0861 123 267 Email: complaints@medicalschemes.com or information@medicalschemes.comwww.medicalschemes.com
LIFE INSURANCE
ShareCall: 0800 662 837 or phone: 012 431 9105
FINANCIAL ADVICE
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FINANCIAL EDUCATION
Ombud for Financial Services Providers phone: 012 470 9080 or 012 762 5000 Email:www.faisombud.co.zainfo@faisombud.co.za
MEDICAL SCHEMES
CONSUMER ISSUES
To look up performance of a particular unit trust fund go to personal-finance/fund-look-uphttps://www.iol.co.za/
Here are sources that can help you with financial education, give you more information on savings and investments, and afford you recourse if you have a consumer complaint or a complaint against a financial services provider 16
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For the latest quarterly unit trust performance, go to personal-finance/collective-investmentshttps://www.iol.co.za/
Ombudsman for Banking Services ShareCall: 0860 800 900 or phone: 011 712 1800 Email:www.obssa.co.zainfo@obssa.co.za
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SHORT-TERM INSURANCE
South African Savings Institute https://waystosave.co.za/#WaysToSave
OMBUDSMAN & REGULATORS
FINANCIAL DATA
Fiduciary Institute of Southern Africa (FISA) phone: 082 449 2569
INFORMATIONclickonthelinkstovisitthewebsite
National Consumer Commission Toll-free: 0860 003 600 or phone: 012 428 7000 Email: (debtEmail:MaxiCall:ShareCall:andcomplaints@thencc.org.zawww.thencc.gov.zaConsumerGoodsServicesOmbud0860000272Email:info@cgso.org.zawww.cgso.org.zaCreditOmbud0861662837orphone:0117816431ombud@creditombud.org.zawww.creditombud.org.zaNationalCreditRegulatorShareCall:0860627627orphone:0115542600Email:complaints@ncr.org.zaorcounselling)dccomplaints@ncr.org.zawww.ncr.org.za
