Advice from the experts

How to teach kids the value of money

Raising your children to be money smart is an essential skill that will benefit them for the rest of their lives. Teaching your kids from a young age about money will help them to understand how money works and they will find it easier to learn how to manage their money. Here’s how to raise money-wise children: Teach Children How Money Works Children need to understand that an ATM is not a magical machine that just spits money out at you whenever you want it. They need to know that in order to get money out of the ATM machine money needs to go in. They also need to understand that money is made either through business transactions (if you are Mompreneur or business owner) or by working for someone and being paid a salary. Show your child the different notes and coins, explaining how it all works together. It will become easier for your child to understand from the age of about 5 or 6 years old. Give Your Child A Piggy Bank Give your child a piggy bank as soon as possible. You never know when a relative will give money for a gift, so you want a piggy bank ready to receive it. You can tell your child that his piggy bank is his “ATM” until he is old enough for a bank account. Teach your child to always put any money he receives into his piggy bank so that he forms this good habit early on. Play Shop At Home Young children love to play shop. You can make pretend money with them out of paper and then make a pretend shop. Find items around the house and put price tags on them. Take turns being the shopkeeper and the shopper. It is great pretend play for your children to work out what they must pay and how much change they must receive. Give Your Child Pocket Money Don’t soil your child by giving him a lot of money. You want to make it enough money so he can buy something small each time he gets his pocket money, but not enough to buy anything big. This will teach your child not only to budget but also how to save up for something more expensive that he wants. Encourage him to save up for something nice rather than always spend all his money as soon as he gets it. It is also important to emphasize to your child that if he wants something after he has spent all his pocket money he will have to wait until the next time he gets his pocket money. Try to give your child as much free rein as possible to decide what he wants to buy with his pocket money. You can advise your child that he could save up for something really nice rather than blowing it all on sweets but let your child make the final decision Encourage Entrepreneurship Let your children know that there is nothing stopping them from earning some money if they want more than their weekly allowance. Think about extra tasks they can do around the home to earn more money and encourage them to think outside the box. If your kids have a hobby they can sell the things that they make. They could do woodworking, knitting or make cards. They could also bake cookies or cupcakes to sell or have a lemonade stand. Help them to understand the concept of working out the cost of making the goods and how to work out their pricing so they make a profit. Your children can also offer services such as washing cars, mowing lawns, walking dogs and babysitting. Lending A Hand Your child may need some help with purchasing an expensive item, for example a teenager that wants to buy a car. A teenager may not have the means to take out a personal loan or any other type of loan that they may need. Chances are good that you wouldn’t want them to take out a loan from a bank anyway at that young age even if they could. If you have the means you may want to give your child a loan and work out an arrangement for them to pay you back. This will give your child an understand of how a loan works in the future for example when taking about a home loan. If you want to help them out but also encourage them to work towards saving up for things themselves you could get create and offer to match whatever deposit they manage to save and then work out a way for them to pay you back for the difference. Conclusion All of the above tips and activities will help your child to form an understanding of the value of money and help your child understand the importance of being frugal and saving up for the things that you need. What things have you done with your children to help teach them about money? Share your tips.

November 15, 2018

Your 12- month DIY financial planning guide

We are fast approaching the end of the year  and it’s usually that time of the year we are starting to reflect on 2018 and all it’s ups and downs. Before the craziness of the festive season takes over, it’s good to take this time as an opportunity to also reflect on your financial year thus far and looking at plans & ways to improve for 2019. We know how hard it is to make a lot of changes at once, which is why we’ve broken up our guide into 12 months or steps to get you “financially fit”.   There is not really any particular order to address this, but see what is possible for each month of the year and tackle it then. 1.Evaluate where you’re at Knowing exactly what you have, how much you owe, what’s missing from your financial life (eg a will or insurance cover) can help guide you on what you need to do in the future, and what your areas of strength are, and what your areas of growth are. 2.Draw up a budget It’s boring and admin-heavy, but by figuring out your fixed and variable expenses, and looking at your bank statements, you’ll see exactly where your money is going, which will help you make smart decisions on what you could cut out of your life. You’ll likely find that you’re spending money on things you don’t need, or you’ll see opportunities where you could be paying less for something. You could also try the 50-20-30 budget method: 50% of your net income should go towards your needs, 30% towards your wants, and 20% to your savings and debt repayments. 3.Review your insurance Are all your policies up to date (eg is your cover enough or are the beneficiaries selected previously still correct) and is all the information in them correct? Insurance might feel like a grudge purchase, but if anything happens to you or your things, this could be financially crippling. If you have dependents the life insurance is essential. If you or your spouse die, where will the money come from to look after those you leave behind? Very few young parents have enough savings in the bank to ensure that their children have the financial means to finish school and continue their education as needed. By having life insurance in place, you protect not only your family’s future, but your children’s education too. 4.Draw up or update your will If you have a will, you get to decide what happens to your assets when you die. If you don’t do this, regardless of your wealth or assets, they’ll be allocated according to the state’s law and this might not be according to your wishes. It’s also essential to choose a legal guardian to look after your children if anything happens to you and your partner. Don’t leave it up to the courts to decide where your kids will go. 5.Start saving for your child’s university education as soon as possible Your kids will be financially dependent on you for at least the first 20 years of their lives. It is estimated that parents who send their children to public schools and pay for a three-year university degree, will spend on average R1.2 million per child in today’s financial terms – and the figure doubles if your child goes to a private school.   By putting away for university now, you save your child the burden of paying back university loans, which will affect their own financial wellness as adults. Look at the different saving options available online such as unit trusts or tax-free saving accounts and choose the option that suit your needs best. Just get started – the sooner you begin, the less you have to put away in the long run. 6.Start settling the debt Whether you have big or small debt, start by paying off at least one, rather than trying to settle all of them at once, which might not be practical. Choose one with the highest interest, like a credit card, and put aside an amount each month in your budget that can be paid, preferably by debit order so you’re not tempted to spend it elsewhere. Best yet is to get rid of those nasty cards and adopt the behaviour of “f I can’t pay for it cash, then I can’t afford it”. 7.Set up a debit order to save By setting up a debit order, your money automatically goes out of sight and out of mind, to a place where it can grow. Choose a tax-free savings account or unit trust  that is more difficult to access than a normal bank savings account, so that you’re not tempted to dip into it regularly. You can increase the debit each year automatically, which is great for continuing to grow your savings to keep up with inflation, and hopefully more earnings from your work. 8.Put aside money for emergencies It probably feels that you’re putting away so much money, you can’t afford anything else, like an emergency fund. Well, setting up an emergency fund prevents you from dipping into your savings, which is there for other reasons and goals than covering the cost of new tyres or a broken dishwasher. Set up another savings account for emergencies only and don’t get tempted to use it for day- to-day living expenses. 9.Consider your retirement What will your finances look like when you’re 60 or 70? Will you be ready to retire and stop working, and have you considered that women especially are living longer these days, so you might need enough to get you through to 100. Whether you’re 25 or 40, you need to consider your retirement funds now. Look into setting up an RA fund, even if the company you work for already provides you with a pension plan. And remember, the taxman incentivises you to save as much as possible for your retirement, therefore make sure that if you can afford the

November 6, 2018

5 Healthy habits to pass onto your kids

All parents want their children to grow up with healthy habits. However, the only way a child will learn to be healthy is to imitate their parents. What you model to your children will be the example that your children follow. Setting good examples early on is the best, as this is when children are very impressionable in their early years. The following are five healthy habits to pass on to your youngsters for them to live their best life. Exercise! Physical exercise is one of the best things anyone can do for their health! The more a person moves, the better they feel. Exercise can be done in a variety of ways. Consider signing your child up for dance or have them join a baseball or basketball team. If you do yoga or Tai Chi, invite them to do it with you. Take a mommy and me exercise class. Or purchase a kids trampoline and have some fun with them, jumping and laughing. Take them for walks, go to the park, or enjoy swimming together. Have relay races, play tag, or kick a ball around. Any type of exercise is fine as long as they are moving their bodies. Benefits of physical exercise include better sleep, a decrease in emotional and social issues, and fewer attention disorders. If you sign your child up for a team sport, they will gain so much from this experience. Not only will your child learn what it is like to work as a team, but they will also learn the value of competitiveness. Another added advantage is they will realize what it means to count on others, as well as be counted on. Eat together as a family. Setting a time for family meals is something that many parents look forward to, as this is a time when everyone can tell about their day. This is quality time spent together as a family. One reason that it is a healthy habit is that it instills in a child that home cooking is better than eating on the run. With fast food chains popping up all over the place, it has often become the norm with many families frequenting them. Life is hectic, and many parents would rather drive through to grab a sandwich instead of going home to make a homemade meal. But when a family eats together, children will model good eating habits. If you start your child off at an early age of eating together and make it a rule that meals cannot be missed by anyone, you will have a greater chance of succeeding with this. Pick healthy drinks. Soda pop is high on the list for many individuals. It is easy to drink when on the run, helps give us a caffeine rush, and is readily available at most eating places, markets, and convenient stores. However, it is loaded with sugar. Water, on the other hand, is the healthiest drink on the planet. It is calorie free and has no sugar. Plus it helps flush out toxins in the body and rehydrates it. Drinking water can make one feel fuller for an extended period of time and is crucial for organ functions. We lose water in everything we do, from breathing to exercising. And when the body is made up of 75% water, it is very important to replenish this on a regular basis. Instill in your child’s mind that water is the best choice for them. Many children like juice, which is fine. However, this should not be their primary drink. Look for juices that are 100% juice that is not loaded with sugars. And if possible, consider diluting the juice with water for fewer calories. Remain positive.  Look at the bright side of life instead of the negative. Parents that model this behavior will see children are better able to manage life’s problems. The more positive a person is, the better they will be able to handle anything that life throws at them. Teaching your child to see the glass as half full instead of half empty will make them happier in the long run. Pass on the unhealthy habits. When your children see you smoking or drinking alcohol, they may get the impression that it is not harmful to do. Many children want to be just like their parents. Thus, it should be no surprise that children who have a parent that smokes are twice as likely to light up than a child whose parent does not smoke. Giving up snacking and unhealthy foods also fall into this category. You can not really expect your child to eat broccoli and Brussel sprouts for dinner if you are eating French Fries. Offer healthy snacks, such as Hummus with carrot and celery sticks, or apple slices and string cheese. Eat these with them instead of chips and ice cream, and your child will see that healthy eating is something to look forward to. Passing on healthy habits to your kids is very important. The healthy habits they learn from you will be beneficial to them all their lives. These five healthy habits will ensure fewer illnesses, more energy, and a happier, wholesome life! If you are not passing any of these onto your children, it is not too late to start. Just by adding one or two of these habits will improve the quality of your child’s life.

November 6, 2018

Millennial parents understand the need for life insurance

Let’s be honest, millennials  continue to and already have changed the world for the better. Those born between roughly around 1981 to 1996 are brilliant, savvy and hard-working people who encourage and challenge  and force change for the better at a level that past generations could never do. They are more connected, grew up with easy access to information and care more about social justice. They invest their money into the environment, women’s rights, charity and everything else that they want to help. And they do all of this in contradiction to the spend, spend, spend of older generations that transitioned into higher debt & higher costs of living. But where does life insurance fit in? Because millennials are more connected, care more about world and other social issues and injustices than previous generations, life insurance is the perfect product for this generation. They are perfectly positioned to understand that this is quite literally the most selfless and smart thing they can do. Think of it this way. Your house or your investment portfolio isn’t really your biggest asset. Your brain and what you can do with it to earn a living, is. If anything happens to you, those who depend on you need to be taken care of. When you take out a policy on your life, you’re protecting your family who need your ability to earn a living to look after them after you’re not there. It’s not exactly something we’d chat about casually. But it should be as it is a reality everyone on this planet faces. But here’s the challenging part. Access to information in the age of the internet has become fast, simple and painless. Just look at the ease of access to information (good or bad quality) on Facebook and Instagram. Or how easy it is to get services as provided by Uber for lifts and AirBnB for accommodation. However, the life insurance industry hasn’t kept up with the times at all as is still being perceived as this dinosaur service with no place in this digital world. And because of this, most people don’t really understand life insurance and have HUGE misconceptions about it. But the truth is also that the quality of much of the life insurance content available on the internet is disorganized, fragmented and let’s face it, not sexy at all. Millennial parents feel obligated to speak with a professional to get their basics in place as there are so many nuances in life insurance offerings that it’s really daunting to expect to educate yourself online. And personally, I’d rather spend time researching the latest camping gear or travel specials than trying to understand life insurance. The amount and type of life insurance you need for your unique family set-up isn’t going to present itself to you out of the blue. You either need to put some elbow-grease in it yourself or ask a professional (which in most cases is paid commission and therefore don’t trust to give us the right information for our unique set-up). And that’s another problem. Millennials are used to teaching themselves everything they need to know about stuff they’re going to buy. They don’t want to be cold-called or emailed. NO CALL CENTRES PLEASE!  Seriously: try selling a millennial anything second hand. Forget about it. They’ve already spent hours doing their homework on the internet and speaking to friends and family. But because education on life insurance has lagged behind so much, most millennials can’t access or learn about life insurance fast enough. Or the topic is just not interesting enough. And we at Hero Life get it! If millennial parents can’t educate themselves, they know they’re going to have to trust professionals. Unfortunately, full transparency hasn’t always been the norm in the life insurance industry. It’s not unfair to say that some members of this professional industry charged higher than necessary fees on the products they were selling or may have sold products that gave the professional the best commission instead of the product that best suited the need of their client. Inevitably, mistrust built up quickly. Unsurprisingly, it usually takes us more than a quick chat to convince clients that we are not taking advantage of them and that we are truly passionate about helping young parents to help themselves. And that we are there to help them do something amazing for their family and to protect their loved ones’ future. There is still a huge need for young people to have insurance. And especially if they have kids. Your family need to be taken care of if anything were to happen to you. And even cover provided by your employer is not always enough.. The good news is that more millennial parents are becoming more responsible and therefore more life insurance-conscious. One study claims that more young people are beginning to say that life insurance benefits are somewhat or very important (85%). This could be because more millennials are now hitting their 30s and starting families. According to the study, interest in long-term care insurance, in particular, has grown among millennials. It’s not that complicated or scary for millenial parents once they start talking with the right people and when they can get the right educational content in front of them. This is why we are excited about Hero Life. We believe we are tailor-made for millennial parents who want to understand the financial basics they need to put in place. We are passionate about empowering young parents as we offer a free online Will, help you to start saving for your kids’ education and offer life insurance. Visit us at Hero Life and chat with us on Whatsapp by clicking this link. Hero Life is an MMI Group initiative, and underwritten by Guardrisk Life Limited (Reg no 1999/013922/06), an authorised Financial Services Provider (FSP license number 76).

October 24, 2018

The things our kids really need don’t need to cost a lot

As young parents, we often worry about our kids’ early development. We want to give them the best opportunities possible to assist with development, but we can end up spending a lot of money on unnecessary things trying to achieve this. According to a study done by UNICEF  SA in 2007: “A family provides a young child with the most important environment in which to grow and flourish. The interactions that infants and young children have with the people around them allow them to absorb the culture and values of their society and to make sense of the world.” Hero Life asked Mare Smit, a qualified occupational therapist, what is really important for early childhood development and to give us some tips on saving money while we are at it.  She says that there are 3 things that are really important to our kids at a young age and these are: that parents take care of their physical needs, that our kids play enough, and that they receive as much love as possible. It is really that simple. And none of these 3 things should cost an arm and a leg. “Our biggest challenge is to not fall into the trap of spending money on things that matter more to us, as parents, than to the child themselves. “ Let’s quickly cover some of Mare’s money savings tips on each of these 3 important areas for our kids’ early childhood development. How to save on a child’s PHYSICAL needs Our children’s physical needs are quite basic as they need healthy food, fresh air, clean water and a safe environment. Have you heard about the “sharing economy”? It basically means that we don’t need to buy as much as we do and that it is more economical to share things between like-minded parties.  This is absolutely true for saving money when our kids are young as you are guaranteed to come into contact with other parents having the same requirements. Therefore, some basic tips for young parents are: Download a free app for monitoring your baby while asleep; Connect with a group of like-minded friends and fellow parents and share clothes the first 2 years of your babies’ life; But don’t stop there, also share everything from recipes to camper cots, strollers, toys, etc., with a group of friends with similar hygienic practices. How to save on a child’s PLAY needs Children need to play most of their day! This is how they grow and learn intellectually, physically and emotionally. It’s the most important part of a child’s day and it needs to be free of obstructions, but also interesting, explorative and FUN.  And the more you can join your child, the better! There are numerous websites on internet where you can google the age appropriate tasks a child should learn on a gross and fine motor level. BabyCenter and Jumpleapfly are some of Mare’s favourite websites and books for stimulation activities as they suggest easy accessible toys or objects that are usually in or around any home. Why spend money on things that can easily be replaced by objects already in your house but that you didn’t think would help with development? Some more tips and examples to help stretch your money: Use things that you have at home – they do not need a toy store at home; Let them play in the garden and outside as much as possible; Join your local library instead of buying books; Join a local park for a cheaper yearly fair and visit as often as you can, each time focusing on something different; Only take out toys your child is interested in, store the others and rotate toys every month so that they feel like new toys every time; Join or organize your own toy library with other like-minded families – this ensures a nice rotation of toys between families so that your kids don’t get bored; Go for regular walks or runs around the neighborhood block. LOVE is the ultimate Free Gift Children need as much love as possible.  They need unconditional love, forgiving love, sharing love, caring love, physical love and patience love!  Many studies have shown that children in overcrowded areas become slow to thrive – not due to a lack of nourishment, but rather due to a lack of physical touch.  Physical touch that is caring and kind can make a world of a difference for any child. Give hugs and hold them as often as you like! It’s free and doesn’t cost you a thing!! Some critical “Love actions” that your child desperately needs and that won’t even touch your budget: Listen attentively to your toddler; Read books together from an early age (start before they are 1 year old); Listen and sing songs together; Laugh together; Play rough and tumble; Hug your child as much a possible.   Hopefully this helps all the Hero parents out there with a few money saving tips that still ensure effective early childhood development. Just remember, in most cases it’s the experience rather than the object that makes a difference. Want to know more about saving? Just ask Hero Life to point you in the right direction – their advice is free. Hero Life is a company that offers a free online Will, helps you to start saving for your kids’ education, and offers life insurance, designed specifically for young parents. Hero Life is an MMI Group initiative, and underwritten by Guardrisk Life Limited (Reg no 1999/013922/06), an authorised Financial Services Provider (FSP license number 76). Visit herolife.co.za for more info. Facebook: https://www.facebook.com/herolifeZA/

October 5, 2018

Everything you need to know about a will

September is National Wills Month, so it’s a good reminder to draw one up if you don’t already have one, or update it if necessary. Financial experts at Hero Life guide you on everything you need to know about a will, by answering some frequently asked questions. Why is a will so important? Drawing up a will is not nearly as complex as most people think it is, especially when one considers the importance of having one. Regardless of the value of your assets, having a will in place reduces anxiety for the family you leave behind, and ensures that all your assets are distributed according to your wishes. Your will also protects your children as you can appoint a guardian for them when you die, preventing them from having to go under the care of the state or the Court choosing the guardians to look after them, if both their parents pass. How does one get started with a will? Nowadays, drawing up a will can be as easy as downloading basic templates from the internet or going through an online will-drafting process. In more complex cases (such as when there are ex-spouses/partners, children from previous marriages, disabled dependents, a special needs trust or any other specific wishes to be implemented), it is preferable to have a practising attorney or reputable bank draw up the will. This ensures that the wishes of the testator (the person who has written and executed a last will and testament) are set out correctly, and that they comply with all the legal requirements. Can the executor be a member of the family? An executor is the appointed person (or company) in your will who will ensure that your wishes as per your last will and testament, are honoured. If you don’t select an executor, the Court will choose someone. However, one can nominate a member of their family to be an executor on their will. If you nominate a spouse for example, this might not be the best option since they could be under emotional stress on your passing, and therefore not ready to make important financial decisions as an executor. If you nominate a family member, it’s a good idea to nominate an attorney as co-executor to deal with the legal issues. Also note that if the Court believes that your chosen executor doesn’t have the necessary skills to act on your behalf, they may select someone to assist your appointed executor. What are typical mistakes people make when drawing up a will? For parents of children, the biggest mistake would be not to nominate a legal guardian(s) for their children, and therefore leave it to the Court to decide. Other typical mistakes include leaving out specific assets from the will, or forgetting to update it as circumstances change. Most importantly though, the biggest mistake is not having a will at all. How often or when should a will be updated? Every time your circumstances change, for example you get divorced, or remarried, or have another child, you should update your will. While you’re at it, also look at your insurance policies and make sure that the nominated beneficiaries of these policies are updated to reflect your wishes. Who needs a copy of the will? If your Will was drafted by an attorney or bank, store it with them. If you decide to store the will yourself, it’s a good idea to make up one file of all your important documents, including your will, as this will make it easier for the people you leave behind. Add to this file a list of all your investments, assets, contact details of your executor and any other important documents you think your loved ones will need. Make sure this file, along with your will, are stored safely and that your loved ones and the person you have nominated as your executor are informed of where this file is stored. If you don’t have a will or an updated will, what’s the worst that can happen? The worst-case scenario if you pass away without a will, is that your assets and money will be divided as per the provision of the Intestate Succession Act. Although the provisions as per the Act are usually fair in that your assets and money will be transferred to your spouse and children, it doesn’t mean that your assets will go to the person of your choice. Not having a will can also mean that it usually takes longer for your estate to be wound up as the Court need to appoint an executor and a legal guardian (if the other parent is also no longer alive). Unnecessary delays in dealing with your estate could affect your family if they rely on you for an income. The same holds true if you don’t update your will as your circumstances change – you want to ensure that your preferred people are being looked after. If you neglect to update your will, it could mean that your estranged spouse receives a portion of your assets, which might not have been what you had in mind.For more information on drawing up a Will, getting started on your kids’ university savings fund or getting life insurance, contact Hero Life.

September 18, 2018

Raising Money-Smart Children is Every Parent’s Responsibility

“Money doesn’t grow on trees.” How often did you hear this saying when as a child you wanted a treat or a shiny new toy? As a parent, how many times have you responded with this very phrase to your own child? While the saying is an extremely common response to children’s demands, parents shouldn’t miss the opportunity to teach their children about basic money matters. Raising money-savvy children has been made easy by the many free resources and financial education tools now available.  Lack of financial literacy and understanding can severely impact how South Africans manage their money. The 2018 Old Mutual Savings & Investment Monitor found that out of a group of 10 metropolitan working South Africans, only six say they are satisfied with their current financial situation. Whether our children grow up to be business leaders, biochemists, architects, chefs or entrepreneurs, they’ll need to balance household budgets and plan financially for their goals and dreams. This is why it’s so important to lay a good foundation when it comes to money matters from a young age.  With my own children – who are aged 10 and 12 – I always have honest conversations about our money, whether it’s planning big purchases like a new car or what kind of holiday we can afford. This teaches them an important lesson about living within your means.  Here are four ways to get the money conversation going. Income vs expenses Speak to your child about the importance of making ends meet and explain the relationship between income and expenses.  Highlight the importance of being realistic about your money situation and help them draw up a simple budget to manage their money. Make earning interest an exciting thing to do Help your children understand the advantages of saving for the things they want in life (rather than paying them off) by introducing them to the concept of earning interest. Explain how compound interest helps your savings to grow. Also explain the flip side of compound interest: how it can make borrowed money (debt) spiral out of control.  Help them set money goals The next time your child asks for the latest Playstation or mountain bike, have a conversation about setting money goals and creating a plan to achieve them – and emphasise the importance of sticking to your plan! This will help them understand that good money habits matter.  Teach them about real money The cashless world of credit cards and smartphone payment apps can make the act of paying very abstract and intangible. Next time you’re paying with your card or smartphone, talk to your child about basic banking concepts. Point out that paying with a credit card simply means you have to repay your bank later – probably with interest. Explain how technology has made it easy to pay for goods, but also easy to get into debt.   Remember actions speak louder than words, and it’s your own money habits that will most influence your child’s relationship with money. Upskill yourself to stay in the know. Know better, and do better. The growing trend to sign up to open online courses like Old Mutual’s Moneyversity and free apps like 22Seven means we can all access information on how to manage our money responsibly and wisely – and then act on it.

September 10, 2018

New Parents’ Guide To Life Insurance

What to remember about life insurance when your a parent?   When you hold your newborn baby in your arms, it’s hard to imagine he or she will someday be all grown up. And that day arrives sooner than expected. Before you know it your little baby is riding a bicycle, going to school, applying for universities and soon don’t need you to hold their hand every step of the way. But, when your children are young you’ll want them to feel protected at all times and enable them to be successful one day. One way is getting basic life insurance in place to make sure their dreams and futures are protected. Here are a few things to consider when thinking about getting life insurance cover for your family. The cost of raising a child and education According to News24 the cost of raising a child is approximately R90 000 per year. This may sound like a lot, but when you consider the costs of food, daycare, housing, clothing, education, and other activities, it makes sense. A good education is something that can really put a lot of financial strain on your wallet in South Africa. It is projected that in 2023 it will cost around R55 000 per annum for a child to go to a public primary or high school. The cost of sending your child to university also ranges from R30 000 to R60 000 a year. Would your partner be able to cover all these costs if you were no longer there? Unless you have a lot of savings or are a trust-fund-baby yourself, most people’s answer would be no. Life insurance is a smart way to ensure that your kids will be protected and get the education you intend them to get if the unthinkable should happen. To plan for sufficient cover, think about the monthly expenses your child (or children) would need covered until they are old enough to support themselves or just use our calculator to calculate the expected cost of their education and your other needs for you. As your life changes, the cover you need will change too Your life insurance needs will change over time. As you expand your family or when you take out a bond, your life insurance needs grow. As your kids become older, you pay off your debt and your savings grows, your life insurance needs become less. By actively managing your needs to pay for just the right amount of cover over your lifetime, you will save a lot of money. Most life insurance policies are not easy to change, but Hero Life your life insurance policy is flexible. When your needs change with time you can adjust your cover online with no extra hassle with just a few clicks – no agents and no paperwork involved. Life insurance can be very affordable for new parents While buying a life insurance policy might feel overwhelming, it’s really not. Or at least, it doesn’t need to be overwhelming. If you’re a parent, Hero Life provides a simple and easy process with affordable rates. We designed a product specifically for young parents they are generally safer, more responsible and healthier individuals ensuring an affordable rate for all. But, we can also help other parents finding the best provider at the best price. Ready to consider your life insurance options? Follow these steps: Understand how much cover you need. The best way to estimate your cover is to use Hero Life’s insurance calculator the expected costs of your kids education and other needs you may have in less than 5 minutes! It is extremely important to be fully aware of your future needs. The only thing that is important with your life insurance cover amount, is that you have the right amount of cover at a given time. On our website, check the premium associated with the amount of cover chosen. It will show you how much you would expect to pay each month for cover. You can easily reduce the cover to fit your budget and you can always apply for more cover later. Get covered. If you are happy with the cover amount and the premium, the process to apply for cover can take less than 5 minutes, and you’ll get immediate cover. If you pay your first pro rata premium, cover will begin immediately and you can cancel your policy at any time, no questions asked. You can also change the cover amount at any time with no fees or penalties. You are also welcome to chat to the Hero team directly over the website or via WhatsApp at any time for any assistance or information required. Life insurance plays a significant role in the protection of your family. Taking you less than 5 minutes anyone has time to apply. Apply now to protect your family and become the Hero they need you to be.  

September 7, 2018

5 Tips for managing those financials of a Hero family

There is no doubt that by bringing a new little person into the world is an overwhelmingly amazing and wonderful thing to experience. But figuring out how to put strong, healthy financial management in place for a new family, is also an overwhelming but stressful experience. And let’s face it, not all of us are finance whizkids or want to be! But here are some easy tips to manage your family’s finances like a pro. Tip 1: SPEND LESS THAN YOU EARN This tip is not just an important part of keeping your family’s finances in order, but it is also a crucial element of any financial plan. Spending less money than you and your partner earn is the first step to ensure more stability and more room to breath when it comes to finances. If you were the one screaming ‘Easier said than done!’ at the beginning of this section, you’re not wrong! But there are some relatively easy things you can do to ensure you’re not spending outside of your means. First, know your income. Knowing how much money you are bringing into the household will be the first step in understanding where the money comes from and where it’s going. Second, by knowing how much is coming in, helps you to draw up a budget (see below)! Third, use some handy money-saving apps to help to identify those items where you overspend.  The great thing about these apps are that they are free & non-judgemental 🙂 Tip 2: KEEP TRACK OF YOUR SPENDING Drawing up a budget to track monthly spending can really be an eye-opening exercise that helps you to understand your financial habits (good and bad). Recording all of your receipts for a month can give you useful insight into how to budget. But if this sounds like too much work, there are a number useful budgeting apps that streamline the task for you – try out 22Seven or most South African banks have this online functionality available to their clients now – and it’s for free! Let them help you to take the slog out of keeping track of your expenses and help you give some insights in how to curb those bad spending habits. Knowledge is power and when you know exactly where your money is going, you’ll be better equipped to draw up a family budget that is realistic about your spending habits, that helps you to spend within your means and that takes your children’s needs into consideration. Tip 3 SET UP AN EMERGENCY FUND The only certainty is that life is unpredictable. And when you have a family to look after it is important to have contingency plans for those unexpected things. By setting up an emergency savings fund can really help to remove some of the stresses and anxieties for when your family faces unexpected income loss or more likely, unexpected expenditures such as medical bills or a car giving you trouble. It is recommended to have a minimum of three months’ worth of basic living expenses in your emergency fund, but the more is always the better. This safety net will help you to avoid accessing other sources such as withdrawing from your retirement fund (which is NEVER a good idea) or going into expensive debt (which is also NEVER a good idea).   Wherever you decide to build your emergency fund, just be sure to invest it into a financial vehicle that is easy to access, low cost and that has low-risk of losing your capital. Your bank should have these types of accounts available. Ask around. Tip 4 USE TIME-SAVING MONEY TOOLS As a parent, you know best how precious time is which is why we understand that you don’t want to spend hours of your time dealing with money matters. Thankfully, you can save by doing a few simple things. First, sign up for mobile banking (if you haven’t already). This will allow you to check your finances, pay bills and manage your budget (if you bank have this functionality). Most banks also offer the option of setting up automatic deposits into a savings account for emergency purposes (see Tip 3 above). This takes the worry and management off your hands so that you can focus on other important family matters. Tip 5 COMMUNICATE COMMUNICATE COMMUNICATE Be open about finances with your partner. This doesn’t just mean knowing how much each person is bringing home but also means discussing big purchases and expenses and how to manage your budget. As a family unit, you and your partner will need to establish the needs and priorities of the household and be talking about how to best implement your budget effectively. Being open about family finances will also help foster a healthy and trusting relationship between you and your partner. Last thoughts: as a new or young family, it’s important to get your thinking right when it comes to money and what your family needs (read our previous article here). By implementing these 5 easy tips will go a long way in putting a system in place that will remove the anxieties around finances. At Hero Life, we’re happy to help young South African families with their finances or point you in the right direction. Try us @ herolife.co.za or Whatsapp us at +27 73 916 9367  to ask any question. We bet you will love us. Author: Kosie Jansen van Rensburg, Co-Founder @ Hero Life #BeAHero #SuperSavvy #HeroParents This article is to provide general information on the subjects covered. It is not, however, intended to provide specific advice or to serve as the basis for any purchasing decisions. Hero Life is underwritten by Guardrisk Life Ltd an authorised Financial Services Provider (FSP 76). Advise is rendered by representatives mandated by MMI Group Limited trading as Metropolitan (FSP 44673).  

August 29, 2018

Should you insure your baby?

Now that you have a baby bump, you don’t need any other bumps in the road. Those who have held that little bundle in their arms, or seen two lines on the pregnancy test, will know just what it is like to suddenly be a mom and how amazing it is – you’re not sure what Cosmic Approval Process let that one through, but you sure are glad. Your pregnancy is life changing and it somehow finds its way into your every waking moment …. trust us! Some people may not get how you can be ecstatic and absolutely terrified about the road ahead at exactly the same time. There are very few things apart from a call to your mother that will assuage the constant thinking, worrying and planning but, surprisingly, insurance is one of them. Why life insurance during pregnancy might work To help ease the ‘what to expect when you’re expecting’ nerves. Most of a women’s stress during pregnancy is not for themselves, but for the baby. Specifically, angst around the birth and whether the baby will be completely healthy following the birth. The MiLittleLife Birth Benefit offered exclusively by MiWayLife offers cover of up to R180 000 for 14 of the most common and severe conditions affecting new-borns at birth. The product provides cover for several conditions affecting the baby and includes things such as Down’s Syndrome, Cerebal Palsy, Cleft Lip and Club Feet. To help ease the what comes next For those expecting for the first time, you may soon begin to appreciate that the birth is not the destination but merely part of the journey and therefore the worrying doesn’t diminish after the birth. In fact, the bigger your little one gets, the more scrapes they can get into! Newborn cover which evolves naturally into child insurance can take the sting out of this both emotionally and financially, with cover for conditions your tot might develop only after birth. A reassuring 79 conditions, plus a catch all, are covered by MiLittleLife’s Child Benefit, including ICU admission costs and dog bites, plus more specialised congenital issues such as Cleft Palate surgery. Because insurers can be people too. MiWayLife has developed the birth benefit to cover your growing baby bump for a minimum of R20,000 from the first premium and a maximum of R180,000 depending on when the policy was taken. And in the case of pregnancy brain, the offering is human – in case of any missed premiums, there won’t be any penalties; your cover will remain in place. While the amount won’t grow, it won’t shrink either! Because doing something will empower you. Finally, investigating cover for you and your baby might just help psychologically. There is so much that can feel frustratingly outside of your control, from when you fall pregnant to the endless worrying over possible complications during the pregnancy and birth. There’s not a lot you can do to prevent complications from happening, but doing something that might offer you a safety net if things go wrong can help ease your troubled mind. Because you’ve done everything that you can possibly do, and that helps a little. Things life insurance won’t – or might not – work for: As a supplement to normal insurance. The other forms of insurance cover are also there for a reason. It is important that anyone who has any reason to believe they’ll be in hospital in the next two years – like expectant moms – have medical aid, gap cover and life insurance. This doesn’t have to be as overwhelming as it sounds. Call up your medical aid or life insurer and ask specific questions about your products. ‘Am I covered for water birth? What about gynae visits? How many? What about anti-nausea meds?’ Ask all of it, because having a baby can be like a wedding: for 8 out of 10 ladies, it costs a lot more than you think from unexpected expenses that add up. As a get-out-of-work-free card. Pregnancy insurance will seldom if ever cover extra leave taken after one’s maternity leave is up. Better insurance products will allow a payout in cash that mothers can choose to use as ‘extra income’ in lieu of leave, but that could leave them high and dry if their baby should fall ill. So, the best policy here is an honest conversation with your boss. That way, your working relationship is secure should you suddenly find yourself needing to take days off if baby requires a procedure. As a substitute for good, old-fashioned relaxation. Insurance during your pregnancy is there to smooth over the little, and bigger, bumps in the road. It gives that extra peace of mind when you’re in the waiting room for the umpteenth time, and takes the financial fear out of the doctor’s statement: ‘we need to run a few more tests.’ However, it’s not a silver bullet for your own state of mind. Insurance can work wonders for your balance sheet, but it works best in tandem with you actively de-stressing, doing pregnancy-safe exercise that boosts dopamine and getting support from various sources, especially if you don’t have a partner walking through it with you. “At MiWayLife, we are constantly working at reimagining life insurance and this presented us with an ideal opportunity in one of the areas that remains under or unserved by the insurance market,” says CEO Craig Baker. “We all know that although the possibility of something unforeseen happening to one of your children is upsetting and frightening, it does not change the reality that bad things happen to good people. Simply spending a few minutes investigating the options and getting the cover in place will provide you with both financial and emotional protection.”

August 6, 2018

Parents, let’s get our thinking right when it comes to money and what our kids need.

Figuring out what is important, allows us to focus and live the lives we really want. When we think about money and being young parents, we often get stuck in the “stuff I think I need” mindset: “I now need a new car and bigger house, a good running pram and all of these new tech toys for my kids… “.  You probably also say to yourself: “It’s helluva expensive and stresses me out as I am not sure that I can afford it, but I want the best for my kids, so let me just bite the bullet.” This narrative can introduce a lot of financial stress into our lives and could easily enslave us to our paychecks, causing us to live from month-to-month paying bills and debt for “stuff we got told we needed” instead of what we really wanted. And before we know, it will affect our frame of mind and happiness, stealing from what we really wanted to do with our lives and who we wanted to be for our kids. Something to remember about money is that no one actually wants money for the sake of it. We want the things that money allow us to do. And when it comes to your kids, we should understand what trade-offs we will be making when we spend money the way we do, and the impact that may have on our kids. Take a little bit of time and think back to your own best childhood memories with your folks… Then think about what it had to cost your parents to create those memories… Often our most impactful childhood memories and what they cost are quite disconnected. Some of my fondest memories are of playing card games while camping with the family, or going on an epic hike with my dad. Or just having my dad next to the rugby field when I scored that try. We all know this and have heard it before: children crave those simple experiences and time with their parents, not the stuff we buy them or where we stay or what we drive. It always comes down to the time we spend with them and the experiences we share where they are the focus point. More than anything else, money allows us to spend our time how you want to. And often, your kids need it to be with them. We should be very careful to give that up for “stuff that doesn’t really matter” in the end. Life is actually quite awesome in that the best things in life is often free when it comes to experiences, as long as we can create the time to experience it. So, stop thinking that you need to be less emotional about money. Money should feel emotional as it is connected to what we can “afford” to do with our time. It’s super important to be smart and structured about it. Know the enemy: every business in the world wants you to buy the things they’re selling. They spend billions each year on marketing and advertising. Their job is to make you believe you want a bunch of stupid stuff you didn’t want before they told you that you want it. These people are extremely good at their jobs. They shape culture, they make you believe ideas like “cars mean freedom” and “your kids will be left behind if they don’t get exposed to this technology” and “expensive means quality”. But these ideas are not your own. They have been implanted in your brain to sell you things. They distract you from the things you really do care about. Remember, life is about trade-offs, and we need to focus our minds and behaviours to be smart when it comes to our money and what we want it to do for us. Making the wrong decisions when it comes to debt and lifestyles can really steal from our families. Debt in particular can ruin us quickly, and it can steal years from you where you need to stress to get back ahead. So, don’t let yourself get trapped. Don’t let people or businesses tell you that you “need stuff”, when it will steal from the things you really want — like awesome adventures with your family, lower stress levels and time to be there when it matters. I know very well everything isn’t for free and that things like education can cost loads and that you may need a big car to get around. The point is just to understand that we need balance things. We need to decide what is important to us, and we need to know that there are smarter ways to do things. This is quite mouthful and does not give you a lot of answers in terms of how to manage your money better, but we will get there. The first step is to make sure we understand what drives our decisions, to make sure we understand that money has trade-offs and to help us think clearly about what we want for our families and for ourselves. And if you still believe it is having a very big, expensive new car, that’s also fine. We just need to become more conscience of what we are giving up for that. Take some time and make your own list of things you want your family to experience and the memories you want to build. Also add opportunities you want your kids to have and what you are passionate about. If our goals are clear, and we know what we are working for, the execution becomes easier. The next step will be to put our plans into action to free ourselves and to focus on the stuff that matters to us and our families. At Hero Life we are happy to help young South African families with their finances or point you in the right direction. Try us @ herolife.co.za or WhatsApp us at +27 73 916 9367 to learn more (on your

August 2, 2018

What new parents need to know about life insurance

Who Needs Life Insurance? Becoming a parent is an exciting, often scary adventure. Long before that happy day, when you get to hold your newborn (and then swiftly hand them over to the nearest grandmother), there’s a lot you need to think about and organise. It’s easy to get caught up—in creating the ultimate, Instagrammable nursery, or squabbling over a name that won’t cause your child a lifetime of teasing—and lose track of your primary role as a parent: to simply provide for your child; both now and in the future. You may have already drawn up a budget with some estimated costs for extra food, housing (if you need a larger space), your child’s daycare, etc. And perhaps you’ve even started putting money away to go towards their future education, which we know isn’t cheap. If so, you’re doing well, but I’d bet good money that you haven’t included life insurance in there. If you’re failing to see why life insurance is relevant to becoming a family, then this article is for you. How can life insurance protect my child? Providing for your child isn’t just about taking care of their current needs; it’s about preparing for their future needs too. Life insurance covers those needs by paying out to your beneficiaries if you die or become disabled. Neither scenario is nice to think about, but not being able to provide for your child or leaving your partner with the financial burden of having to do so alone, is a far less pleasant thought. Who should get insured? Both parents should get insured because, if something happens to either one, the other will have to pick up the slack. This applies to stay-at-home parents just as much as it does to the breadwinners, because you would need to replace their contributions towards childcare and housekeeping with daycare or a housekeeper, and that costs money. Which types of life insurance should you get? There are many different life insurance products out there, which can make choosing the ones that are right for you as new parents quite overwhelming. To protect your new family, you should be looking at products that cover you if you die or if you become disabled. If you die, your debts need to be settled and having a product that pays out a lump-sum amount is a perfect match for this need. You might also want to get cover that replaces a part of the income you would’ve contributed to the household. If you were to become disabled and couldn’t do your job anymore, you’d want your family to continue to flourish with an income protection benefit that pays you a salary for as long as you cannot do your job. How much cover do you need? The right amount of cover depends on you and your situation, and would be influenced by specific details like how much you earn and how much debt you have. Whatever your situation, you need enough life insurance to cover your family’s financial needs. Now, you could calculate this the hard way, or simply get your Indie plan which will show you in under 7 minutes exactly what you need for peace of mind. How much will it cost you? We’ve already established that having a child is expensive, but losing a parent is a financial risk you just can’t afford to take. You pay for insurance on a month-to-month basis, which is called a premium. Your premium will be calculated based on your risk and will take into account how much cover you need, how old you are, your gender, your health, and whether or not you smoke or take part in any dangerous hobbies. If you’re young and healthy, your premiums could be surprisingly low. When should you get it? The good news is, the younger you are when you get insured, the lower your premiums ought to be because you’re likely to be viewed as low risk by the insurer. So it makes a lot of sense to get covered now. Also, with Indie, you have the added bonus of earning Bounty when you get insured, which is money that’s invested for you and grows until you’re 70; so you’ll be covered and investing at the same time. Talk about smart parenting. How do you get it? Traditionally, life insurance is bought through a broker, or partially online with compulsory medical screening thereafter. But between caring for your newborn,  trading in the coupé for a station wagon, figuring out how on earth the car seat works, and keeping your career on track, you don’t have time to be running around in search of life insurance. You ought to be able to get it in less time than it takes to watch a “Build Your Own Crib” video and, unlike the crib, it should be instantly ready and unwaveringly reliable. With Indie you can get covered in 6 minutes, so there’s no time like the present. https://www.indiefin.com https://www.facebook.com/indiefin/ https://www.instagram.com/indie_fin/ https://twitter.com/indie_fin

July 6, 2018

Why new moms must re-look insurance needs before baby arrives

Expecting a new baby is always an exciting time, particularly for first-time moms who are exposed to a whole new world of baby related must-haves. While it’s easy to get swept up in pre-baby planning, it’s just as important to ensure you are prepared by updating your insurance requirements before your baby arrives, according to Casey Rousseau, Marketing Manager of 1st for Women Insurance. “Generally speaking, there are five main insurance requirements all new moms should re-look in the run-up to the big arrival – car, home, personal, portable possessions and life cover,” she says. There will be a number of once off purchases which you, or even family members and friends, will make before baby arrives, and with the right insurance policy in place, you can keep it that way.  Some of these items include: ·         Cot:  R700 – R11 250 ·         Compactum: R1 300 – R3 200 ·         Baby monitor: R600 – R4 200 ·         Humidifier: R250 – R1 200 ·         Breast pump: R300 – R1 200 ·         Pram and carry: R1 000 – R3 000 ·         Car seat: R1 000 – R3 000   In terms of home insurance, Rousseau says it’s not just about adding all your expensive new purchases to your home policy, but also finding out what insurance would be required for specific baby-related items transported in your vehicle such as a pram, car seat, and anything stored in your baby bag. “In the unfortunate event that your vehicle is stolen or damaged with your critical baby essentials inside, they would in fact fall under the portable possession section of the policy, and not the car insurance policy, meaning it is always best to check with your insurance provider on what type of cover you will need,” says Rousseau. “There are also various personal insurance policies available such as cellphone policies, personal accident or scratch and dent policies to name but a few, which you can also consider adding to your insurance basket to ensure comprehensive insurance that best suits your lifestyle,” she adds. And while baby equipment and gadgets are replaceable certain things are not, and for this reason Rousseau emphasises the importance of thinking long term when it comes to securing the financial future of your child. Life cover is essential if you want to ensure your child is financially well taken care of should anything ever happen to you. “It’s very important for families to think about not only the type of insurance cover they need in preparation for a growing family but to also consider the benefits provided. With 1st for Women for example, our Guardian Angels Lifestyle Assistance benefit includes Nurse@First, a service which moms can call at any time of the day or night to get advice on what to do if their baby is sick, while the Guardian Angel on Call benefit provides emergency medical assistance when you are in a severe accident,” says Rousseau. “By being prepared before your baby arrives and ensuring your insurance needs and the benefits offered through the policies are right for you, it’s one less thing to worry about as a new mom. With insurance specifically designed for women, we know how helpful it is to have less to think about, so that you can get on with enjoying your journey into motherhood,” she says.

July 6, 2018

Pregnancy: Taking care of your nutritional and financial needs

By 1Life You’ve finally taken steps to confirm the reason behind your weird cravings, unexpected emotional outbursts, the fatigue as well as all the other unusual things that have been happening to your body of late and so begins the journey towards motherhood. One moment you only had yourself to worry about, and now you’re making way for the new bundle of joy that’s growing inside of you. When you are expecting, taking care of your nutritional needs goes well beyond ‘eating for two’. Instead, there are certain nutrients that your body needs during this journey, to ensure your baby is healthy and that you keep yourself in excellent condition as well. Maryke Gallagher, a registered dietician in Cape Town and President of the Association of Diabetics in South Africa, states that from a nutritional point of view, the first 1000 days are the most important. This includes the time the baby spends in the womb, where the first 1000 days are said to set the stage for healthy brain development, growth and appropriate weight gain and building a strong immune system. Having a healthy nutritional plan is therefore vital and can also assist with protecting against chronic diseases like diabetes, heart disease and high blood pressure later in life. As a result, what you put in your body during this period is extremely important. Some crucial nutritional needs include:   Energy needs: These increase in the second and third trimester, but this does not mean you should eat for two. It means increasing the energy intake by 800-200kj per day, the equivalent of a small meal snack, like yoghurt, fruit and nuts, or a slice of rye bread with nut butter and a fruit.   Protein needs increase: Focus on eating more safe proteins, at least twice per week. Options that are generally considered safe include trout, salmon, herring, pilchards and mackerel. Plant proteins are mostly incomplete proteins. This means that legumes like lentils, chickpeas and butterbeans need to be combined with grains such as brown rice, quinoa or barley to form complete proteins. Soya beans and tofu are some of the only complete plant proteins. It is generally believed that it is safe to be vegetarian while you are pregnant if you plan carefully to eat sufficient proteins that meet the body’s demands.   Omega 3 Fatty Acids: These essential fats are important in pregnancy for healthy brain development in the baby. Fish is one such example of a good source of Omega 3 fatty acids, which you should consider before taking supplements to ensure that you are meeting your daily requirements. These type of vitamins reduce the risk of preterm birth and play a role in the visual acuity of the baby. Later in life, they play a role in the IQ and behaviour of the child. They also play a role in regulating the mood of the mother.   Total fat intake: Every cell in the body is made up of fats, and cell membranes consist of phospholipids that influence how well cells communicate with each other within the body. Plant fats are particularly valuable and include nuts, seeds, avocado, olives, olive oil, and flaxseed oil.   Micronutrients: These are essential vitamins, minerals and phytochemicals. During pregnancy, the important ones are Folic Acid, Iron, Calcium, Vitamin D, B12 and Choline. Choline plays a role in the first trimester development of the baby, in particular the brain development and formation of neural pathways. Choline is found in animal-protein-rich foods such as eggs and beef. Haricot beans, soya protein, pulses and dairy products (like milk and yoghurt) are good sources of Choline. Folic acid is found in fruits and vegetables such as leafy dark green vegetables, liver, legumes and fortified cereals.   The above is all important to keep in mind. However, your nutritional needs are in fact only one of very many aspects that you will need to consider as an expecting mom. As you enter this new life stage, your financial needs are also set to change and you will then need to start asking yourself questions about your financial plan. Things like, can you provide for the wellbeing and financial security of your child, the schools you want them to attend and if you are saving enough towards their future education. Safeguarding your assets is also an important consideration, which ensures that these will go to your child in your absence. These are the first of many aspects related to your financial planning that you will need to consider as you enter this new chapter. When starting your pre–birth financial planning, do a financial needs analysis to determine what your future financial plan should look like. Then ask yourself if your current long-term insurance provider can adjust your cover to cater for your growing family and financial needs. If they are unable to, look for a provider who can – and one who will become your partner in providing financial assurance as your family grows.

June 27, 2018

The quick and easy financial checklist for new parents

Taking your first steps to put the financial basics in place for your family can be really simple. Here is what a new parent needs to do and why, and how it can be done immediately! When you’re a young parent with a full plate of responsibilities and a host of new baby expenses, getting your financial affairs in order are typically not as big a priority as it should be.  But is it worth it to put your family at risk if something does go wrong? A new parent should get at least the following in place: Update your Will to ensure you select the right legal guardians for your kids should anything happen to you and your partner – don’t leave it up to the courts to decide; Get life insurance to protect your child’s future by insuring their education; Start saving for your kid’s university/college education as soon as possible. Your kids will be financially dependent on you for at least the first 20 years of their lives.  Most of us will pay for their monthly schooling from our salaries and hopefully there is enough left in the budget to start saving for that university/college fund.  It is estimated that parents who send their children to public schools and pay for a three-year university degree, will spend on average about R1.2 million per child in today’s financial terms – and the figure doubles if your child goes to a private school.  That is a lot of money that will come from your future salary! And it is why becoming a parent is such an enormous financial decision. Should anything happen to you in the next week, where will your family’s money come from? Very few young parents have enough savings in the bank to ensure that their children have the financial means to finish school and continue their education as needed. How do you protect your children’s future? That’s why it is so critical to have enough life insurance in place right away. It will ensure that your kids can enjoy all the opportunities you want for them, no matter what happens. Many parents already know that things like getting life insurance and a Will is important, but delay or forget about it. Or they just do not know where to start as it is such an intimidating thing to do. Research shows that young parents in South Africa need cover the most and 75%* do not have any at all. Becoming a new parent is an exciting milestone.  But by checking these financial items off of your to-do list, you can sleep soundly knowing your family will be well taken care of, no matter what happens. Are you ready to take that important financial first steps? Speak to one of the Hero Life experts and see how easy they have made it. They are passionate about assisting young parents with the basics and and their experts help parents digitally at no additional cost …. so that you can get things done anytime from anywhere. Visit  www.herolife.co.za for more info or email [email protected] or [email protected] directly. Or click here to chat on Whatsapp. It’s really that easy.

June 21, 2018

Bargain hunting: Knowing beforehand what is on special saves money & time.

June is a month that is packed full of celebrations. It’s a month that features Youth Day and Father’s Day. This year we’re adding Eid-Ul-Fitr to the mix! That’s a lot of shopping to be done, and a lot of money to be spending.  But, it’s vital that your kids get to join in on the celebrations as this builds character for the future. This means that you must find ways to stretch your Rand so that you could get all your items ticked off appearing on your list, in a convenient and almost stress-free manner. The best way to hunt for savings is shopping around. Remember when the best way to find sale items was visiting each supermarket scrounging their shelves? This however, meant that you ended up spending more money on petrol. Today, searching the internet for specials is easier than taking an actual trip to the supermarket. This too has its downfalls. Finding accurate information in one place requires some time searching; which could mean a few hours of your time too. Knowing what specials, you’ll be purchasing means that there is no need to cart your kids for longer than needed. You’re able to conduct your shopping as soon as the supermarket opens as this is the time that they are the least busy. It’s ideal as you purchase your items in comfort without having to weave amongst the rest of the shoppers. This also means that your kids are calmer and easier to deal with because less time in the shop means less boredom.  Take a few toys, favorite clothing and extra snacks with so that they are fairly entertained on your shopping trip.   How to take advantage of specials and really save money. Before hopping in your car, look at Shoprite specialsto find superb prices on food, toiletries, baby goods, food for your fur babies, and appliances too. Shoprite is well known for their usually low prices. However, they often reduce their prices which makes them extra special in our book. Make a list of what you really want; this way you won’t be easily swayed in to making unnecessary purchases in the shop. Once you’ve created your shopping list; the next step is to shop around. Checking out PicknPay specials onlinehelps in your decision making. Choosing your favorite grocery items, clothing, and most household goods makes it easier to do beforehand. Knowing what they have to offer allows you to decide if it’s worth it to go to the next shop as you would already know what is on offer. This dramatically reduces the chances of you overspending in the shop and saving on fuel. In addition, you’re able to compare the prices between the two supermarkets (and others), without having to be at an actual shop.

June 19, 2018

Hidden costs & their impact on study options

Grade 12s should already be well into researching their study options for 2019 and should aim to beat the rush and submit their applications sooner rather than later, whether it be for a public university or private higher education institution, an expert says. “But before you settle on a degree or institution, it is important to make sure that you considered all your options thoroughly, including those closer to home, which will allow you to avoid the hidden costs unrelated to the actual cost of the course,” says Nola Payne, Head of Faculty: Information and Communications Technology at The Independent Institute of Education, SA’s largest private higher education institution. “Of course it is exciting to think about moving to the other side of the country and starting a whole new chapter of your life outside of your familiar environment, but there are some solid reasons for opting to choose an institution close to home,” she says. Payne says apart from the usual advice of how to apply for admission, what you should consider, and which courses you would like to do, the financial impact of studies beyond fees, and the role this should play in your decision, are rarely discussed. She says prospective students should remember to also consider the following when determining how to structure their budget: Prescribed textbooks and supplementary material.This could include art material, laptops, and field-specific equipment, to mention but a few. Students will need to budget for two semesters, each of which will contain different modules with their own resource requirements. Depending on the nature of your course, there are also costs associated with printing and copying.   Accommodation.Will you be applying at an institution that would require you to live in student residence, on off-campus accommodation or will you be staying at home? If you’re not going to be at home there are costs such as rent, meals, airtime and laundry that need to be budgeted for as well.   Travelling costs. This would not only include the daily commute to the campus from nearby student residences or off-campus accommodation, but your budget should include extra costs involved in the longer journeys to return home during the recess periods. Travelling to and from the campus would also incur expenses and this can add up quite quickly. Tickets for taxis, buses and trains or the cost of petrol for your own private vehicle should also be considered.   “There are sound financial reasons for considering studying at an institution close to your home. On top of that, the value of your support structure should not be underestimated.  South African first year dropout rates are high, and lack of support is one of the reasons,” says Payne. “There is a huge gap between the demands placed on you at school, and what you’ll need to deal with in your first year studying. The workload is much greater, and there are also additional emotional pressures associated with this new stage of life. We therefore urge the Class of 2018 to carefully investigate all their options, and all the factors that will impact on their emotional and financial wellbeing during their first year at varsity.” Payne says prospective students should remember that there are many options for higher education besides public universities, and that registered private institutions are subjected to exactly the same ​regulations, accreditation requirements and oversight. “Considering a local higher education institution will almost always be more economical than one situated far away, because you then have the option of staying at home and saving costs on those extras that come with rental accommodation, plus you will have your support system around you when times get tough.  Given the challenges that first year students face it makes sense to consider delaying living independently until that hurdle is overcome.  Also remember that some institutions have more than one campus, so you could perhaps consider transferring at a later stage when you have found your feet.”  

June 13, 2018

Affordable Life Insurance For Young Parents

When you’re a young parent with a full plate of responsibilities and a host of baby expenses, buying life insurance is probably not a priority. But research shows that young parents need cover the most and 75%* don’t have any. Your kids will be financially dependent on you for at least the first 20 years of their lives. Life insurance guarantees there will always be financial resources available to them should something happen to you. It’s one of the best ways to ensure your family’s financial security when they need it most. We live in a world where you only buy one song on an album or where you watch episodes of a series as and when you want, so why can’t you get life insurance in the same way? Hero Life is simple life insurance for young parents, with a fixed term of five years that can be extended or expanded. Online signup and an upfront price create a great user experience with no medicals or paperwork. Expert support is available anywhere in the process and it’s simple to adjust your cover amount if you need to. Hero Life is where young parents can control their money and protect their families. There is no faster, more flexible and affordable way than Hero Life to sort out your life insurance needs. Visit www.herolife.co.zafor more info. Facebook: https://www.facebook.com/herolifeinsurance/ Hero Life, a MMI Group initiative, is underwritten by Guardrisk Life Limited (Reg. no. 1999/013922/06), an authorised Financial Services Provider (FSP license number 76). *(TGISA 2014B/2015C/2016A)

May 18, 2018

Four money lessons to teach your child

Given how important financial skills are to navigating life, it’s surprising that schools don’t teach children more about money. Making smart financial decisions is important to ensure that children grow up to be economically active citizens and are empowered to build a bright future for themselves. Nelly Mofokeng, MD at Junior Achievement South Africa(JA South Africa), shares four money lessons that will help your child develop the necessary skills to make smart financial decisions. Needs versus wants The first thing to teach a child is to recognise the difference between a need and a want. Grasping this concept will have a positive impact on a child’s financial future. Additionally, it is not enough to simply recognize the difference, parents should explain why money gets spent on a need before a want. One of the best ways for children to understand how to differentiate between wants and needs is to take them shopping. As you put things in your basket, ask them if the item is a want or a need. Let them explain their decision, then give them your answer. Creating a budget While children do not have to pay rent or buy groceries it is important to teach them how to budget effectively from an early age. Budgeting provides the critical foundation they need to manage their money in the future. Start small by giving them as little as R10 and telling them how much of that they need to save, spend and give. Give the money in coins so that your child can see his/her money jar fill up or get depleted. This simplified budget will help teach your child about the value of a rand, how to make choices and how to prioritise. Earning money Children need to learn to earn money just like they would in the real world. Parents can teach this by paying them small amounts for additional chores like washing the car, cleaning the bathroom and polishing shoes. When children work hard to earn money, they are less likely to spend it foolishly. Saving money for a goal Saving is difficult to master for people of all ages and children rarely wait for anything these days. They have instant access to information, TV shows, books, music, etc. Ultimately this translates into an attitude of ‘I want it now‘. It is important to control this mindset by teaching your child to save for what they want. “Encouraging saving and smart spending habits is a crucial step towards building a money-savvy future. Financial education also gives children the confidence to make informed money decision,” advises Nelly Mofokeng, managing director at JA South Africa. These money lessons are taught in the JA South Africa More than Money Programme, which either spans five sessions or half a day workshop. In 2018, the target is to reach 7 000 Grade 7 learners through this programme. If you would like to volunteer to assist with workshops, please get in touch with JA South Africa by emailing them on [email protected] calling 011 331 3150.

May 17, 2018

How to Budget for That Unexpected Pregnancy

An unexpected pregnancy can bring upon a slew of emotions.  Should you feel excited?  Should you feel stressed? Maybe a mix of both? Regardless of how you feel, there’s one thing for certain:  It’s going to put a damper on your budget, even if you’re doing okay today.  An unexpected pregnancy is possibly one of the most common life-altering events when it comes to your budgeting, and many soon-to-be parents are often shocked at how much a baby can really cost you. While my last pregnancy was expected, my first came as a shock.  I figured, at the time, I would have nine months to plan and it would be enough time to straighten out my financial obligations so that I could enjoy motherhood to its fullest.  After all, your babies don’t stay small for long, trust me on this one. To help you budget and enjoy your newborn instead of stressing out about your finances, here’s what I did when approaching my finances: Evaluate Your Needs It’s no secret a kid isn’t cheap.  In fact, the USDA says it can cost $245,000 to raise a child until they reach the ripe age of 18. During my pregnancy, I needed to focus on what my child would truly need to survive.  This included the obvious:  diapers, food, health care, a car seat, clothes and hygiene products.  Honestly, that’s it.  While a baby bouncer or one of those cute baby play mats are great, it really isn’t necessary, especially if you’re on a tight budget.  The same can be said about the furniture.  Don’t splurge on the fancy $800 diaper changing table made from cherry wood or that $500 designer branded diaper bag.  After all, it’s for a baby and things are going to get messy.  Don’t forget to throw a baby shower as your loved ones can pitch in and really help you with what you need.  Again, while it’s tempting to scan everything at the baby registry, again, only put the things you truly need.  If anything, ask for diapers as you will need lots! Even if you plan on having a baby shower, you still won’t get everything, so create a list of all the things you need, not want, and write down how much each item will cost if you were to be as frugal as possible.  For example, a gently used stroller can often be found at a local consignment shop for less than $50.  The same can be said about baby clothes.  Remember, your baby will outgrow their outfits fast, so don’t be surprised if they only wear it once or twice. Look at Your Healthcare Options The minute you know you’re pregnant, the first thing you will probably, and should do, is visit the OB/GYN. While it’s hard to budget for immediate healthcare since you will need it today, it’s so important to take care of your health and visit your doctor as soon as possible to get things rolling.  Even if you don’t have health insurance or feel your policy isn’t adequate enough, a good doctor’s office will be able to explain what you’re going to owe, help you setup a payment plan and/or even get you in contact with the state to see if you qualify for aid. Even if you have the best insurance policy possible, it’s important to research it to know what’s going to be covered as many policies have restrictions on who you can visit and how many appointments you can have. Taking Your Income and Expenses into Consideration With my first pregnancy, I was still finishing my bachelor’s degree, and at the time, I had to rely on my husband’s income, which is kind of scary now that I think of it.  While I was making some income working part-time freelance writing, it wouldn’t have been enough to pay the bills to survive.  Plus, I had to keep in mind that even if I had a great paying job, I would have had to take off a few weeks after the baby to recover.  For some, it could be even more time off if you were bed ridden during the pregnancy or had complications during the birth, so this is something to take into consideration. With all that being said, now is the time to start tracking your income and determine how much you can save when your baby is born.  Plus, using the list you made, as stated in my first point, you can determine how much you’re going to need for all the necessary supplies.  Even if you’re able to save $100 per month for the next nine months, this is an extra $900 that can go quite far in terms of diapers and formula.  Remember, your child is going to be your number one priority now, so it’s best to avoid eating out, drinking those fancy $10 drinks at the bar and taking those weekend getaways that cost $500.  Every dollar you can save can help save a lot of stress in the future, trust me. Aside from saving a fixed amount of money, it’s also important to plan what your expenses and income are going to look like when the baby arrives.  When the baby arrives, you’re going to want to figure out when you’re going to go back to work, and if you do, who’s going to take care of the baby?  Factor in the diapers, formula, daycare if needed and necessary starter accessories for survival.  Remember, a good daycare can easily cost $200 per week, if not more, in a higher cost of living area. Lastly, Don’t Panic! An unexpected pregnancy won’t be the end of the world.  When I really look back at it, there’s never a good time for a pregnancy as there always seems to be an excuse.  If you plan it right and you know where your money is going, your stress levels can lower quite a bit.  Plus, if your baby has the necessary essentials, a

February 6, 2018

When to cut the financial helping hand for your children

By Winnie Kunene, money psychologist and trustee on the board of Truth About Money – a 1Life initiative As a parent, I’m sure you can recall a time when you battled with the guilt of saying no to your children for that toy or sweet that they wanted while doing your monthly grocery shopping? Unfortunately, the reality is that those tough decisions are some of the most important ones you’ll have to make, as you prepare them for dealing with life’s disappointments. Most parents would agree that one of the toughest decisions that you’ll have to make one day, is to cut the financial helping hand for your children. Although, they might be facing financial burdens such as paying off student loans, underpaying jobs and extremely high living costs, the reality is that they won’t learn the ropes if you don’t teach them. In fact, according to Winnie Kunene, a money psychologist and trustee on the board of Truth About Money – a 1Life initiative, it’s important to teach children how to deal with money from a very young age. For example, they must save up to 10% of what they are earning – be it from their pocket money when they are still little, or from their salary as soon as they take that first step towards the corporate world and earn a sustainable income. There comes a time in a parent’s life where they need to realise the importance of letting go financially. With that said, let’s take a look at a few pointers that can guide you and your children when it comes to flexing their wings and becoming financially independent adults: Teach your children the value of money – Teaching your children the value of money is critical, and the best part is, you get to be creative! This can range from taking your child with you to the bank when little, to comparing the prices of luxuries and necessities whilst doing grocery shopping and giving them the pocket money that they need to use during the month and save, should they wish to buy a special item for themselves. “It also helps to speak to children about budgeting as soon as they are old enough. You can even take it a step further and sit down together to draw up their monthly budget,” adds Kunene. The importance of knowing when to cut all financial support for your children – Think about it, how are your children supposed to know and accept that you are reducing/cutting the financial support you give them, if you don’t manage their expectations effectively? “The reality is that it starts with you – you need to be firm about your children standing on their own two feet. It can start with something as simple as them giving you a 10% contribution of their first salary towards rent whilst still staying under your roof,” says Kunene.  “Once you have taught your children the importance of managing their money effectively, you also need to be prepared to be ‘the bad cop’ and cut financial support, when the time is right. Learn to say no to unnecessary requests for money and stick to your word once you have made the decision.” Struggling to break away – Do you feel like you don’t know when the right time is to break away financially, or that you are struggling to be assertive when it comes to disciplining your children around finances? Find someone that you can trust – maybe a best friend that is also a parent who is also struggling with the same issue. By using the buddy system, you can both encourage each other to stop spoon-feeding your children, as well as how best to go about it. In addition, you can also complete a financial education course from www.truthaboutmoney.co.za to empower yourself to master the art of managing, not only what you give your children financially, but your own money too. And the best part about this course, valued at R2500, is that you don’t have to pay anything to complete it. It is available for everyone! “The truth is, tough love is a real part of everyday parenthood, even though some parents may even feel there is no right or wrong time to cut the financial helping hand for their children, as they still consider them to be their “babies” even once they move out and start a life of their own. However, it’s important to start today, don’t just talk without doing.  Ensure your children are fully prepared for the financial challenges that life throws at them,” concludes Kunene.

October 12, 2017

Teaching Your Child How to Save

By Thami Cele, Head of Savings & Investments, at Absa Retail and Business Banking To avoid the next generation making bad financial decisions and to help them enjoy financially fit lives, children need to be taught the essentials about money. If you’re a parent, this doesn’t mean filling your child’s head with financial facts and figures, but rather offering them age-appropriate money lessons. It’s never too soon to start either, as research by bestselling author Beth Kobliner in her book Get a Financial Life reveals that children as young as three can grasp financial concepts, particularly around saving and spending. Good financial skills are vital to ensure we are able to get through life as adults without too many pitfalls. From making a savings plan to guarantee security after retirement or as back-up in case of emergency to avoid falling into a cycle of debt, a healthy understanding of the concept of money is essential and it is important to start implementing these learnings from a young age. If you are a parent, here are five simple ways to teach your children about saving money:   Get a piggy bank This form of savings is more meaningful for younger children who can’t add or count too well. Keep the savings visible: you can try the old jam jar system as a savings mechanism for both short-term and long-term savings and allow them to even draw pictures to illustrate what they are saving for – like a toy guitar or teddy bear for short-term saving and perhaps a trip to an exciting destination for long-term purposes.   Take them to a bank to open their account This helps youngsters understand where their money is going and introduces them to the concept of financial institutions. In doing so, you help your child prioritise short-term and long-term savings.   Model good spending and saving habits As parents, you have the biggest influence on the way children save or spend. Examine your own spending habits: next time you dash out to get the latest designer handbag or shoes, ask what message you are really sending to your impressionable children.   Show them the money We have to remember that children today don’t see cash and financial transactions the same way we saw them when we were growing up, so we have to consciously make sure that children understand cash as the basis for learning more about money later. When giving children an allowance or income, give the money in denominations that encourage saving. For example if the amount is R50, give out five R10 notes and encourage that at least one be set aside for savings.   Also talk about money in front of your children. Many people avoid this, but if you have healthy discussions about money in front of them, they are more likely to develop the right attitudes towards savings.   Teach the difference between a want and need Talk to them about how adverts are designed to make them feel a need for the item they are selling – and how to differentiate between what they want and actually need. It will stand them in good stead when they are adults. Teaching your children how to save is an important step to prepare them for financial responsibility and a secure future. But it won’t go very far if you don’t “practice what you preach” and save for the future yourself. Whether we like it or not, most of us take after our parents and emulate the habits we observed in them during childhood. In other words, you need to start acting how you want your children to act when they grow up.  

September 6, 2017

Raising financially smart kids

Type ‘teaching children about money’ into a search engine and most of the information you’ll find makes the point that it’s seldom too early to start. From a much earlier age than most parents think possible, children have the capacity to soak up financial lessons such as understanding the value of things, saving towards something rather than immediate gratification and that money must be earned. Games such as playing shop or even old-fashioned marbles, where the coloured glass balls are the currency, can teach children important financial lessons. Unfortunately, other than the informal market of the playground where marbles or Stikeez substitute for money, most schools don’t formally teach young children ‘money’ or financial principles – it’s largely left up to parents. What are the lessons you should be teaching your children? Marlies Kappers, head of marketing at financial services provider, DirectAxis, says most of the literature touches on seven broad principles. Do you need it? Something that you can do early on is to help children differentiate between wants and needs. Trapped in the supermarket aisle of death leading to the tills, we’ve all seen children, or worse, experienced our own children, whining because parents won’t give in to incessant demands for sweets. Rather than telling children you’re not buying them something ‘because we can’t afford it’, explain that you’re choosing not to spend your hard-earned money in that way. It’s even better if you can say why: ‘I’m saving some money so we can go to the movies together in the school holidays’. Understand the value of money Games such as shop-shop, where children ‘buy’ differently priced items with loose change or even marbles are a good way of starting to teach young children the value of money. As they get a bit older you can take the lessons to the real world and ask them to help you do price comparisons between items in the supermarket. Explain why you make the choices you do. For example, it may seem more expensive to buy a larger bag of rice or potatoes, but it’s cheaper than buying two smaller bags. Using price-comparison apps such as pricecheck, or by visiting https://www.pricecheck.co.za , you can get older children involved in checking where you can get an item at the best price. You control your pocket money There’s no hard-and-fast rule about when to start paying pocket money, but there seems to be a general consensus that about age six is a good time. Pocket money is an important step in teaching children financial responsibility. If you give them some money every time they want something, they may struggle to grasp the value of money and the basics of budgeting later in life. Initially, pay children pocket money once a week. As they get older you can make this once a fortnight and later once a month. This will teach them to make it last. Money is earned Building on the lesson about understanding the value of money, children must be taught that pocket money is earned, not given. They can earn it for doing household chores such as making their bed, tidying their room or feeding a family pet. As they get older and receive more pocket money, so their responsibilities should increase. Learn to save The accepted rule of thumb is that you should save 10% of what you earn. You can encourage younger children to put away some of their pocket money in a piggy bank each week. As they get older, open a bank account and suggest they try save some pocket money and also any additional income they may get, such as birthday money or income from part-time-jobs. Teach them money management Teach children to manage their money from the outset. If they want a toy, gadget or fashion accessory explain how they will need to save for it, possibly sacrificing other treats. Help them keep a record of earnings and expenditure in a book or on a spreadsheet. When you pay pocket money look at the previous month and explain what they did well or how they might better have spent or saved their money. If they do want to buy a big-ticket item such as a bicycle or surfboard and you lend them the money, getting them to pay it back in instalments over a given period will teach them how to manage debt. Let them learn lessons Suggest or advise, but you shouldn’t dictate how children should spend their money. Don’t be disappointed when they make mistakes. The biggest lesson they’ll learn is when they splurge on something and later realise that it was a waste of money. When they do, don’t bail them out. Let them make their own plan to supplement their income by doing more chores or getting a part-time job. Teaching children about money and how to manage it are valuable life-lessons that they will be able to keep applying long after they’ve left home and have families of their own.

April 5, 2017

How Does Debt Counselling Work?

Debt counselling is the process of assisting consumers who have debt related problems. With the total consumer debt exceeding R1.4 trillion in South Africa alone, there is a growing need for professional debt assistance. Debt is unfortunately a harsh reality for many people – with thousands of individuals struggling to make ends meet, assistance is often needed. A debt counsellor will draft a budget for you – this will reflect your income less your expenses (mortgage, food, school fees, etc.). The debt counsellor will then establish an affordable repayment instalment for you, according to the money you have available. Your debt counsellor can also negotiate with your creditors on your behalf, to obtain reduced premiums for you, allowing you to pay off your debt in a reasonable period of time. The debt counselling process often includes the following services: Professional budget advice Payment restructuring Negotiating with credit providers Monitoring payments Providing after-care support At Help My Debt we handle all the negotiation on your behalf and take care of the entire administration process, as outlined by the NCA. We help you to regain your financial freedom by providing professional debt counselling services according to your unique needs. We work to deliver a professional and focused service to over-indebted consumers. The Benefits of Debt Counselling By making use of a professional debt counsellor, you can benefit from the following: One affordable instalment Legal protection from your credit providers Enough money to cover your basic monthly living expenses We negotiate on your behalf with credit providers You will be on the road to becoming debt free

September 22, 2015

Should Kids Get An Allowance?

One thing that parents do is connect chores with allowance…. bad move! But they think that their kids are automatically motivated by money, as they are themselves. So Mom holds Sarah’s allowance over her head to get her to finish her work. Some even hold it over their kids heads to just be good or to do their homework. Truth be told, it might work in the beginning and for some kids more than others, but what happens one day when your child tells you the she has enough money and walks away, declining to complete her chores, her homework, or be nice to her brother? Although many will disagree with me, it is my professional opinion that connecting a child’s allowance to chores is wrong. In fact, giving an allowance to younger children all together is a mistake. My main reason is that we want our children doing their chores and contributing to the family because they should, not because they are going to get paid to do it. If the child equates getting money in exchange for doing chores and they don’t care about the money, they may not care about the chores either. If you do decide to give an allowance, I suggest you give it for the sake of giving it and not holding it hostage to get your needs met. It just sets up younger children with the wrong idea about money and getting paid. One family I know suffered a financial hardship. Dad was laid off from his job and spent years recovering before he was able to acquire employment again. As a result, the parents had to stop the payment of the allowance in order to pay for critical needs. The children didn’t understand and became confused and fearful about money, chores, and Dad’s lack of work. Your teenagers may be in a better position to earn an allowance once they begin to understand the value of money, saving, and spending. Somewhere around the age of 15, the parent is likely to begin teaching his or her teenager life skills. That’s where paying an allowance may come in handy. The teenager is likely to begin thinking about paying for some items on their own and it gets them started down the road of earning an income. Different from an allowance, I do support paying a child for hard labor; tasks they complete that are above and beyond the expectations of daily or weekly chores. Cleaning out a garage, mowing a lawn, or weeding a garden are great examples of tasks you can pay them to complete that are worthy hard labor. When my own children were young, I would prepare a list of larger sized chores that, if completed, were a big help to their parents. I would assign a monetary value to each one and let them pick from this regularly updated list.

June 11, 2015

How a bespoke Last Will & Testament will save your business

Take a moment. ….Now take a deep breathe.  Imagine that was your last.  Nightmare! You can’t imagine anything worse, right? Wrong!  Now imagine this night terror… You’re unprepared for death.  Everything you’ve spent your life working so hard for, your business, your immortal legacy, your white Pickett fenced home, your precious children and your loyal Labrador are all wasted away in the hands of the South African default system and the taxman. If you do not have a Last Will & Testament (“Will”) in place, this is the detrimental reality your empire and your loved ones face.   If you have a template “google” version of a Will, be cautioned that that is potentially more hazardous than not having a Will in place at all. Entrepreneurs and business owners are often concerned with limiting business risk.  In order to do so it is vital to engage in an estate planning exercise which ensures that your business interests and your empire are given mechanisms to survive your death, whether it be that your business interest is inherited by a family member or your business co-owners are given a mechanism to pay your business interest over to your loved ones.  Failing to do so is likely to result in major losses and the crashing of an empire. It is imperative to have a bespoke Will drafted by a professional who, through their vast knowledge of the law, is able to tailor the most suitable estate planning mechanisms which give effect to your intention … and a little less for the taxman. What to put in your will… Your voice and instruction, enforceable by law, as to the division of your assets (your business in it’s entirety, the house, the car, investments, the special ring you want your daughter to have). i.e “who gets what”. As a business owner a valid will allows you to leave an immortal legacy. Often sole trader and partnership run businesses are left in a detrimental situation on the passing of a key player. The business is abandoned, only to later be sold for well under market value, by an executor with no relevant business experience or who isn’t given sufficient powers in order to protect your business interests during the winding up process. Powers granted to your executor in terms of your Will. As well as mechanisms to ensure your loved ones are protected against your enterprise’s debt liabilities. A business owner will always have debt liabilities from which your loved ones need to be protected; In practice, we often see many a business having to be liquidated or sold just to cover taxes payable. There is a dire need to minimize tax and estate duty payable whether through the creation of separate business and personal asset trusts, or otherwise.  There are options available to every circumstance and every lifestyle to sidestep many of the financially detrimental consequences of your passing away. It is your benefit to make use of these. As a parent of minor children, the appointment of the desired and most compatible guardians for your children. Leaving the appointment of the caretakers and the future of your children, where you are not here to safeguard them, should not be left in the hands of a Court or a distant relative you haven’t seen (or liked) in years. An Executor who will be responsible for winding up your estate and manage your affairs as if he or she had set foot in your shoes. Bear in mind that the executor is entitled to remuneration of 3,5% of your gross assets and 6% of any cash value of  your estate.  Value which rightfully belongs to your family, not a financial institution. For this reason we advise our clients to nominate a family member as executor who is then able to appoint professional agents to assist in the winding up process for a mutually agreeable fee. A Testamentary Trust– it’s structure and inner workings to assist you in “asset protection, estate duty savings, dilution of income tax and the protection of beneficiaries such as minor children and/or incapacitated” heirs. Means for the maintenance of your dependent heirs are similarly put into place in this way. What makes a will valid… Validity hinges on a number of formalities which include:- signing within a certain measurement of the text at the end of the Will as possible, signing in the presence of at least 2 witnesses over the age of 16 and of sound mind, requirements to be met where a testator (or testatrix) is only able to sign by making a mark or otherwise, effecting valid amendments and formatting formalities. Please note that is by no means an exhaustive list Lack of compliance with these formalities has resulted in the Master’s Office rejecting Wills, leaving families deprived and having to resort to financially and emotionally costly High Court litigation. When not to use a free DIY online template… “Using a DIY will is like pulling out your own tooth with a pair of pliers instead of going to the dentist” A bespoke Will is an affordable investment for your estate as well as your heirs. Special Offer…  As a ParentingHub affiliate, MBI is offering you a 30% discount on all Estate Planning services which include drafting a Last Will & Testament, liquidity determination and strategy. Valid until end of February 2015. For a Free, no obligation, consultation to ensure your families future is taken care of, give our dedicated team at MBI Attorneys a call on:- Chantelle Martins                        Beverley Brown [email protected]        [email protected] 082 837 1358                                       082 573 9680 “Planning is bringing the future into the present so that you can do something about it now”.  

April 29, 2014

Reduce Stress by Sorting Out Your Finances

The majority of parental problems that I see in my practice are exacerbated by stress, and what can be more stressful than sinking into debt. So, as the financial year comes to a close, here are some tips to sort out your finances and start the new financial year in a less stressful and more kid-friendly way! The first step in sorting out your finances is to know what they are. Print out your bank statements and credit card statements and make a list of all the income and expenses that you have every month. Most people avoid this simple activity and would rather stay in the dark, but facing the truth is way less stressful than waking up one day to find out you’re bankrupt! So take a deep breath and just do it!! You need to know your income and expenses if you are to create a successful budget and stick to it, and this is step number two. Work out your essentials each month and what they come to and always make sure that you are putting some money away every month into a savings account, or some extra money into your bond. If you find that you are overspending and don’t have any “disposable income” at the end of the month, relax. Acknowledge this and also that you are not alone – the majority of parents find themselves in this position. Here are some tips to sorting this out by bringing your expenses down: Cut up your account cards. If you can’t afford something, you shouldn’t be buying it. The time will come when you’ve saved enough and can treat yourself, but as much as possible, never use credit – and definitely don’t use credit to buy your groceries. Along the same lines, put your credit card in a glass of water in the freezer. If you really need it, it’s still there, but you won’t make impulse purchases if you need to wait for it to defrost first. Look at the debit orders you have – see if you can decrease your insurance, call your security company and ask them to re-look a your monthly fees, cancel any unnecessary memberships. If you haven’t been to the gym in 6 months, make a decision to go or see if you can sell your membership. Cell phones! Wow! My husband and I just halved our phone bills by changing service providers. If your contract is at its end, don’t just automatically upgrade with the same provider – shop around, look for specials, ask for discounts. And if you’ve already got 5 phones at home, take a contract without a phone – if you add up the monthly payments and see what you’re really paying for that phone after two years you might want to rethink. Beware, too, of getting to the end of your contract and not upgrading or changing, as you are then still paying the monthly amount for the phone even though you’ve finished paying it off. Take note of the cappuccino factor. This is the name given to those little spendings that you do regularly and don’t think they amount to much. Like the cappuccino you buy on the way to work. Do this little exercise: Take one thing that you don’t really need but buy regularly – the coffee out, the cigarettes, the bar of chocolate. Now multiply the cost of this by the number of times you purchase it in a week. Then times that by the 4 weeks in a month, then by the 12 months in a year, and then by 10 years (and that’s not even including inflation, interest etc). You’ll be amazed by how much you could save over ten years just by cutting out that one thing… who knows, you could even be a millionaire!! Awareness – of your spending habits, your shopping habits, your eating habits. Look at your statements and see where the money is going. Are you eating out too much? Could you be shopping at a less expensive store? Are your kids wearing name brands when a regular t-shirt could do?! Shop, eat and live consciously. This is quite a task, I know, but it’s very empowering when you get it under control. And you, your partner and your kids will benefit in the long run. Think of all those restful nights NOT worrying about the bills!!

April 5, 2014

Teaching your children the value of money

Teaching our children to be responsible with their finances is essential as financial habits are formed early. Most of what your child learns about finance , they will learn from your example. Are you sending the correct financial message?  Start of on the right foot by first setting a good example of how you manage your  personal finances and  take advantage of every opportunity to instill great money-smart habits in your child. As important as what you tell your child about money, it  is also important to watch how you talk about it. Rather than saying “We can’t afford that”, a more positive  approach is to say “We don’t buy every thing we want, we choose which are the most important things to spend our money on.”  Teaching the difference between needs and wants early and how to priorities will ensure a firm foundation for their own personal finances as they grow.  Setting a  budget with them and encouraging them to save up for those non-necessities may seem cruel but the gratification of holding an item you saved for and bought yourself is a feeling of pride. The lessons we teach our children greatly changes as they grow. So, when do you start teaching your child about money?  From about 3 -6 years : Introduce your child to easy concepts …. #Why we need money Allow them to handle the coins and notes. Start a simple piggy bank , allowing them to save . Let them know and understand that we need money to buy the items we want. Play pretend store or restaurant games . Take them shopping and allow them to pay with their own money . #Money doesn’t grow on trees Take your child to work, show them that people have to work to earn money. Point out the work people in your community do. Teach them about needs and wants. Allow them to make a wish list and help them save for an item by doing a simple chore, ie :feeding the cat. Age 6 -13 years – At this age a child becomes aware of the value of money #Choices are important Have your child ask themselves questions like Do I need this ? Can I borrow it? Would it cost less somewhere else? Teach your child to shop around and compare prices. Your child should know  that smart shopping helps your money go farther. #Budgets Set budgets from allowances . Some parents give their children an extra allowance for toiletries , birthday parties , ect and allow their child to do the planning . #Allowances Allowances are a personal choice. These can be freely given but it is always wise to have your child earn an allowance. This prepares them for a working environment. Amounts for allowances vary from household to household. We have always tried to maintain a R10 per year allowance . (So , if you are 10 you receive R100 allowance per month) #Bank accounts Open a bank account for your child at your preferred credit provider. Most have exciting packages open to children. Allow them to meet the bank manager and treat this visit seriously . Show your child how to make a deposit , withdraw and how to use an ATM. Explain the concepts of credit, interest and saving to your child. #Savings are cool You should save a tenth of all your incomes. If this habit is installed in your child early , they will develop healthy saving habits . We started with two jars – save and spend . This allowed my children to see the money go into each jar and how the save jar filled up , whilst the spend jar stayed empty. Set goals or make a wish list to stay focused on why you are saving. # Make use of resources In the world of technology parents have many apps and sites open to them to encourage and teach financial skills. One of my personal favourite apps for teaching finance skills to children is “mymoneymap” from Nedbank. It is designed to guide your child to work efficiently with their allowance and gain the required financial skills . Open to everyone , you do not need to be a Nedbank account holder to make use of this app. http://www.nedbank.co.za/website/content/products/product_detail_new.asp?SubSubcatid=6949&Subcatid=719&ProductID=657

November 8, 2013
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