Advice from the experts

Budgeting with children

Having children gives you a myriad of rewards that we all get to brag about. However, what’s not often spoken about is the costs surrounding raising children. When you have a child, costs can sky-rocket if you are not careful. However, there are ways you can budget and save when you have a baby or toddler. Write your budget down One of the biggest personal finance mistakes people make is not knowing exactly where their money is going. One takeaway coffee here, another quick grocery shop there, and our budget goes out the window. Try this exercise. Carry a notebook with you wherever you go. For one week, write down absolutely everything you spend money on. From in-store shopping to online shopping. Once you have done that, you can take a realistic look at where your money is going when it comes to the small things. Is there anything on that list you don’t have to have? Then cut it out. Add these expenditures to your usual monthly debts and expenses, and you will have a great starting point to start your saving journey. Make budgeting a team effort Budgeting with your partner is essential. When you are sharing the costs of a child and a home, knowing who spends money on what is important. Sit down with your partner and have an open discussion about where money is coming in and going out. Make decisions on who is paying for certain expenses and stick to that.  Savings should be an expense You should have a ‘savings’ section under your expenses. No matter how small the amount, savings should not come at the end of your budget with the thought process of ‘I will save what is left over.’ You should try and save before you spend any money. Whether it is to a savings pocket, an investment fund, or a short-term endowment policy – make putting a little money aside a priority. Cut back on expenses Once you know where your money is going, it is much easier to start cutting back on certain things. Amazed at how much money you spend on takeaways? You probably didn’t know the extent of that amount until you had it written in front of you. Go through your expenses, set aside a reasonable amount for spoils, and cut back on the rest. Baby saving tips Buy in bulk – keep a lookout for any specials on baby products and groceries and buy these in bulk. Remember to consider that your baby is growing and may need a new size nappy or different aged formula in the near future. Significant bulk purchases for savings are nappies, wet wipes, toiletries, unperishable food, and cleaning products.  Make your own food – we know this is time-consuming, but bulk-making your own baby/toddler food and freezing it into portions is a fantastic money saver. Try to stick to one-pot meals that are filled with nutrients and label your freezing containers with the content and date. Google affordable meal recipes, and you will be surprised by the number of affordable meals out there. Clinic vaccinations – When vaccinating your child, take the extra time to go to your local government clinic for them. The wait may be longer, but the cost-saving is worth it. If you would like to get the vaccinations that are only available privately, then book with a private clinic for just those. Second-hand goods – It’s easy to get swept up in the mania of baby products and goods. And there may be a part of you that wants to ‘keep up with the Jones’. But we are here to tell you that your baby won’t notice whether their pram or cot is brand new or second-hand. Decide what you are willing to have second hand, then search the web and Facebook marketplace for the best deals you can find. Please just make sure that you do not pay upfront for items that you haven’t seen!  Sell it – If you are not planning on having another child in the near future, as soon as your baby outgrows something – sell it! 

September 25, 2024

Smart Spending for Tiny Tots: Essential Baby Gear & Development Boosting Toys on a Budget

Welcoming a new baby into the family is an exciting and joyous occasion. To be sure your little one has everything they need for a happy and healthy start, it’s important to invest in high-quality baby gear and developmental toys. Here’s a comprehensive list of must-have items that will support your baby’s growth and provide peace of mind for parents. Developmental Toys Activity Gyms  Activity gyms are perfect baby toys for engaging your baby’s senses and encouraging physical development. Look for gyms that include a variety of textures, colours, and sounds. Features like dangling toys, mirrors, and tummy time mats can provide hours of entertainment and stimulation. Soft Books  Introduce your baby to the world of reading with soft books. These books are designed with bright colours, different textures, and interactive elements like crinkly pages or squeakers. They’re a great way to foster a love of books and reading from an early age. Stackable Toys  Stackable baby toys are excellent for developing fine motor skills and hand-eye coordination. Choose sets that include different shapes, sizes, and colours. As your baby learns to stack and nest the pieces, they’ll develop problem-solving skills and spatial awareness. Musical Toys  Musical toys can help your baby develop auditory skills and a sense of rhythm. Look for toys that offer a variety of sounds and tunes, such as rattles, xylophones, or interactive musical mats. These toys can also be a fun way to introduce your baby to the world of music. Shape Sorters  Shape sorters are classic developmental baby toys that encourage cognitive skills and fine motor development. Choose sorters that feature a variety of shapes and colours. As your baby learns to match the shapes to the corresponding slots, they’ll develop problem-solving abilities and hand dexterity. Baby Gear Essentials Strollers  A good stroller is indispensable for new parents. Look for one that offers a smooth ride, adjustable handles, and a sturdy frame. Features like a reclining seat, ample storage space, and easy folding mechanisms can make outings with your baby more convenient and comfortable. Car Seats  Safety is paramount when it comes to car seats. Choose a model that meets the highest safety standards, with features like side-impact protection, adjustable harnesses, and cushioned headrests. Convertible car seats that grow with your child from infancy to toddlerhood can be a cost-effective option. Highchairs  Feeding time is made easier with a reliable highchair. Opt for a highchair that offers a secure harness, easy-to-clean surfaces, and adjustable height settings. Some models come with removable trays and can be converted into a booster seat as your child grows. Baby Carriers  For parents on the go, a baby carrier is a practical choice. Select a carrier that provides ergonomic support for both you and your baby. Look for features like adjustable straps, breathable fabric, and multiple carrying positions to provide comfort during long walks or errands. Cribs and Bassinets  A safe and comfortable sleeping environment is essential for your baby. Cribs and bassinets with adjustable mattress heights, sturdy construction, and breathable mattress materials are ideal. Some models also offer additional features like rocking or vibration modes to help soothe your baby to sleep. Conclusion Investing in high-quality baby gear and developmental toys is essential for your baby’s growth and development. From strollers and car seats to activity gyms and musical toys, each item plays a central role in providing a safe, stimulating, and nurturing environment for your little one. By choosing the right products, you can be sure that your baby has the best start in life, while also making parenting a more enjoyable and stress-free experience.

August 23, 2024

Parents, which financial lessons are you teaching your daughters?

My parents were instrumental in teaching me the biggest financial lesson of my life. My motivation to be educated, empowered and independent stems from the tough experiences my mom endured as a woman, wife and eventually single mother. Witnessing her hardship of having to raise four kids all on her own, I vowed that I would not be left in a similar position and this is what led to my passion for financial education.  As parents, we play a critical role in how our kids turn out as adults. Parenting today has evolved and we have become more involved, more conscious and rightfully so, as we raise our kids in a challenging and complex modern environment. We must equip them with life skills from a young age so that they can survive and thrive as adults in what will become an even more competitive and challenging environment.  Women have travelled a difficult journey over the years. Our predecessors have had to fight for gender equality, the right to work, the right to have a seat at the table and as parents of daughters, we must ensure that we provide the foundation for which they believe they can stand tall, that they can stand on their own and that they can stand up for themselves.  Our belief and value system is instilled in us from a young age, primarily obtained from our parents. Our attitude and behaviour with money is largely as a result of witnessing how our parents felt and treated money. So it is important that we practice what we preach and use positive language when talking about money.  Here are some essential money principles you can use when passing on matters regarding money to your daughters:  Money gives you options Follow your passion Have your own money, always Know your rights Be involved, Be aware and Be informed Money gives you options People always refer to money as the root of all-evil. This is not necessarily true as our value system plays a large role in how we earn and spend money. Being in a position where you have financial abundance allows you to live the lifestyle you want and to help others to achieve their goals and dreams too. Our daughters should never be made to feel guilty about earning or spending money if it is done in an ethical way.  Follow your passion If you listen to the advice offered by the most successful people in the world, the common advice they all offer, is that if you follow your passion, the money will follow. Finding your passion allows you to live a life of purpose and you end up doing what you love. There is nothing worse than earning an income from a job you dislike. There will be no motivation to grow and succeed. Following one’s passion provides a sense of purpose and joy and when this is rewarded with money it is far more fulfilling than earning money from a job one hates.  Have your own money, always. From the time we are little, little girls are led to believe that their knight in shining armor will come along and rescue them (often known as the Cinderella complex). In the financial planning industry, we often witness many women transferring their financial rights to their male spouses. Many women give up their financial power in lieu of raising the kids and managing the household. Their financial value becomes underestimated as a result of not contributing financially to household expenses. Teach your daughters that whilst there is nothing wrong with being a stay at home mom, it is critical to have proper conversations about money and what if scenarios. Having their own money, gives them the option of getting out of potentially harmful situations.  Know your rights Women have played the submissive role for far too long and many women have the wool pulled over their eyes because they do not know their legal rights. As a result, they are bullied into situations where they have no control. Know where to go if you need advice. Teach your daughters to know their rights, to not sign contracts they don’t understand or incur debt they can’t afford.  Be involved, Be aware and Be informed Many women have taken a back seat when it comes to financial matters of the household. Not being involved can have disastrous consequences especially when there is a major lifestyle change caused by death or divorce. Make sure that your daughters are aware of the importance of saving for the things they want and to plan for the long term. Many of us spend exorbitant amounts on how we look and feel, on things that matter in the short term, yet we haven’t given much thought to put money aside for things like emergencies, education and retirement. Teach your daughters to take control of their financial lives from a young age. As a mom myself, I know how many things we need to juggle. It is sometimes impossible to be in control always. However, we have a duty to make sure that we raise strong independent women so that they can stand tall, stand on their own and stand up when they need to. 

November 9, 2023

Mom’s Guide to Spending Less and Saving More: Practical Tips for a Thrifty Lifestyle

Being a mom is an incredibly rewarding experience, but it is a costly one. The expenses of raising a family add up fast, leaving many moms with financial stress. With smart strategies and creativity, you can learn to spend less and save more. Here are some practical tips for moms to reduce household spending and boost savings. 1. Create a Budget: The first step to spending less and saving more is to create a budget. Track your income and expenses to get a clear picture of where your money is going. Allocate specific amounts for essential expenses like groceries, rental, school fees, and transportation. A budget can help you identify areas where you can cut back and save. 2. Shop Smart: When it comes to shopping for your family, smart choices can make a big difference. Look for sales, use coupons and download grocery cash back apps, such as SnapnSave, to make money back from your till slips. Consider buying generic brands and buying bulk to take advantage of better pricing and save money in the long run. Plan your grocery trips and meals ahead of time to minimise food waste.  3. Embrace Second-hand Shopping: Children grow quickly, and their clothing, toys, and equipment can become expensive. Explore thrift stores, consignment shops, and online marketplaces for gently used items. Find out if there is a second-hand clothing store for school clothes in your area or hook up with other school moms to buy and sell school clothes, sports equipment, and textbooks. This will save you a fortune on school expenses.  4. Reduce Energy Consumption: Water and electricity costs are soaring. Teach your family about turning off lights, unplugging devices, and conserving water. Consider investing in energy-efficient appliances – it will cost you more initially but pay off over time.  5. Meal Planning and Cooking at Home: If you are eating out or ordering takeaways often it adds up very quickly. Rather plan your meals in advance and prepare homemade, cost-effective meals. Cooking at home not only saves money, it is also a healthier option. 6. Cancel Unnecessary Subscriptions: Review your monthly subscriptions, including streaming services, gym memberships, or magazine subscriptions. Cancel any that your family no longer uses or can do without. If you want to keep your subscription, double check your membership benefits. You may be able to get by with a downgrade and spend less each month.  This will free up money for more essential expenses or savings. 7. Practice Mindful Spending: Before making a purchase, take a moment to consider if it’s a need or a want. Delay impulsive buys and give yourself time to think about whether the purchase is essential. This can help you avoid unnecessary spending. 8. Emphasise Experiences Over Things: Instead of constantly buying material items, prioritise experiences and quality time with your family. Activities like picnics in the park, nature walks, or board game nights can be just as enjoyable and far less expensive. 9. Set Savings Goals: Set some goals for savings by deciding what you will need money for in the future, for example retirement, your children’s education, or holidays. Try to set aside some of your income every month for savings, even if it is a small amount. Make sure to allocate some savings for an emergency fund so that you won’t have to resort to using credit to get by.  10. Consider Extra Income: If your schedule allows, explore part-time work or freelancing to supplement your income. Online opportunities or working from home can be flexible options for busy moms. Moms can be the ultimate money-saving superheroes for their families by implementing these practical tips. Spending less and saving more doesn’t have to mean making sacrifices. With a well-planned budget, smart shopping, and a focus on what truly matters, you can provide for your family while securing a more financially stable future. So, go ahead and start your journey towards a thrifty and fulfilling lifestyle today.

November 3, 2023

Teach your Teenager to work wisely with money

Children and teenagers have to be shown and taught how to deal with money. We are advised that, ‘The love of money is the root of all evil’. The source of this wisdom is the Book of Timothy in the Bible. This well-known adage is often misquoted as, ‘Money is the root of all
evil’, which does not mean the same at all. It is greed and corruption and the misuse of money which can cause trouble for us, not the
cold, hard cash or credit cards in your wallet

April 28, 2023

Investment basics for children

Talking about budgets is often the starting point in the financial education of kids. While budgeting can help you live within your means and stay solvent, only investing will help you become wealthy and financially independent one day. However, there is often a lot of jargon in the investment world, which is perhaps why we often don’t explain it to kids. Here are five investment basics for kids in plain language anyone can understand from the CEO of an investment company.  Saving is for the short term, investing is for the long run Setting money aside monthly for unexpected expenses is a good start. As the last few months have taught us, an emergency fund is essential. Because you might need this money at any time, you don’t want to invest it in anything where the value will fluctuate too much, or where you can’t access it at short notice. This money should be kept in an easily accessible form, like a savings account or a money market fund. However, if you want to save for bigger long-term goals you will need to give your investment enough time to grow and invest in something that offers a higher return on investment than cash or money markets. Time is the secret ingredient when it comes to growing wealth Very few people become wealthy overnight. Listening to the stories of great business people, it soon becomes clear that a lot of hard work preceded their ‘overnight success’. The same applies to money. Every year’s gains add to that of the years that came before, and these gains add up. The key is not to give up or touch this money too soon. If you planned to invest your money for a certain time, it is usually best to stick to your plan unless something material has changed. Invest in the right things for the right reason This is the part that seems to trip many people up. We often get asked “what is the best investment?” However, there is no such thing (with a few caveats I’ll get to last)! The right investment is one that will do what you need it to do. If you need an emergency fund, then the right investment is one you can access quickly and where what you get out is more or less what you put in. But if you are investing for retirement, then accessing it now is not important. You also don’t want to just get back what you put in, because in thirty years’ time that money won’t buy you very much because things get more expensive over time due to inflation. You want your money to grow faster than inflation, so you can buy the same things (and maybe even more) in 30 years’ time.  Asset class ABCs Asset classes are a way of sorting the things (instruments) we can invest in into groups by how they tend to behave. There are four basic types: cash, bonds, property, and equities. Less risky assets give you lower returns while more risky ones provide higher returns in the long run. Risk can sometimes mean losing money, but mostly it means an asset does not behave as expected.  The least risky assets are cash and money markets, but they typically offer the lowest returns over the long run. Bond investments pay an agreed interest rate over an agreed period, and this is typically a higher rate than you can get from cash investments. Property investments are more risky than cash and bonds, but tend to offer higher returns. In addition to residential property, you can invest in things like shopping centres or office complexes, where people pay rent. When it comes to building wealth in the long-term, however, shares – also known as equities – are the place to be. These are like owning a part of a company. However, share prices move up and down all the time, sometimes by up to 30%, like we have seen recently. Because of this, it is often better to hold a balanced or multi-asset portfolio. This just means you combine all the asset classes to get the best of all worlds – more return for less risk. Lastly, choose whom you trust with care While each type of investment has its place, not all investment services providers are a safe bet. Some may be outright dishonest, others may be incompetent. Be careful of anyone promising fantastic returns in a short space of time (as you’ve just learnt, making money takes time!). Always check that the person you entrust your money to can be trusted, and invest with a company you know, and that is covered by solid regulations. By Anet Ahern, CEO at PSG Asset Management

April 21, 2023

CAN MONEY BUY HAPPINESS?

Is money really the key to happiness, health, and well-being? Affinity Health, a leading provider of high-quality healthcare, explores recent research that suggests there may be a more complex relationship between money and mental health. In today’s consumer-driven society, many people believe that accumulating wealth and material possessions will bring them happiness. But is this really the case? According to a study published in the Journal of Happiness Studies, people with a higher income tend to report higher levels of overall well-being. However, the link between wealth and happiness is complex. “The researchers found that the relationship between income and well-being levels off after a certain point, meaning that beyond a certain income level, additional wealth does not necessarily lead to increased happiness,” explains Murray Hewlett, CEO of Affinity Health. “One reason for this may be that people have a tendency to adapt to their material circumstances, whether they are good or bad. This means that although a new car or a bigger house may bring temporary joy, the excitement eventually wears off, and people return to their baseline level of happiness.” But money can have a more direct impact on well-being through its effect on people’s daily lives. For example, having enough money to afford basic necessities such as food, shelter, and healthcare can reduce stress and improve overall mental health. On the other hand, financial insecurity and poverty can have detrimental effects on mental health, leading to increased rates of anxiety, depression, and other mental health issues. When we are struggling to pay bills, afford necessities, or save for the future, it can be a constant source of stress and anxiety. This stress can lead to sleep problems, difficulty concentrating and decreased overall quality of life. On the other hand, when we have financial stability and feel financially secure, we are able to relax and focus on other areas of our lives. We are able to enjoy our hobbies and pursue our goals without the constant worry of financial stress. Good financial health can also lead to a sense of accomplishment and control over our lives, which can have a positive impact on our self-esteem and overall mental well-being. Adolescents Who Feel Poorer May Have Worse Mental Health  This relationship between wealth and mental health may be particularly pronounced in adolescents. A study published in the Journal of Adolescent Health found that adolescents who perceived themselves as being poorer than their peers had worse mental health outcomes, including higher levels of anxiety and depression. This may be due to the importance of social status and material possessions in the social hierarchies that often form among adolescents. Feeling like they are falling behind their peers financially can lead to feelings of inadequacy and social exclusion, which can have negative effects on mental health. The good news is that there are steps that can be taken to mitigate the negative effects of financial insecurity on mental health. One approach is to focus on building non-financial sources of well-being, such as strong social connections, a sense of purpose and meaning, and engaging in activities that bring joy and fulfilment. In addition, there are practical strategies that can help alleviate financial stress, such as creating a budget, reducing expenses, and seeking out financial assistance or counselling when needed. Conclusion While it is true that money can bring certain benefits and can help to improve overall well-being, it is not a panacea for happiness. “The relationship between wealth and happiness is complex, and there are many other factors that contribute to overall well-being. By focusing on non-financial sources of happiness and taking steps to manage financial stress, it is possible to improve mental health and overall well-being,” concludes Hewlett.

March 10, 2023

What should estate planning look like for parents?

Not many of us spend a lot of time thinking about estate planning when we’re young and starting out in life.  It’s a common misperception that having your affairs in order is only necessary for the rich and old.  However, becoming a parent changes us irrevocably in many ways, not least by raising strong feelings about what might happen to our children if we die.  What if the unexpected happens, and both parents die at the same time? In South Africa, if you die without a valid Last Will and Testament that includes the appointment of a guardian for your child, it is the Courts that will decide their fate.  In addition to guardianship, which is taken care of by your Last Will and Testament, you’re going to want to put careful plans in place to create the best possible safety net for your children that will see them through to independence.  Planning your estate and keeping your estate information current is the best way to make your wishes abundantly clear and cushion your children in the face of the unpredictability of life. Rachelle Best, founder and CEO of Heritage Vault, a digital solution for organising and securing all of your important estate information says, “the day before my daughter was born, I remember clearly feeling this huge sense of responsibility.  No longer was it going to be only me that I had to look after, but there was a whole new life coming into the world who would depend on me. This was also the moment I started making a list of everything that I had to sort out as soon as I got home. I realised that, should something happen to me, everything must be in order so that my daughter could be optimally looked after and that my wishes for her would be heard.” For parents, it’s about more than financial security… The basics of estate planning for parents will, of course include financial planning and making provision for the funds it takes to raise a child by taking out life insurance policies and making investments.  However, there’s a lot more that parents would want to leave with their children should they pass unexpectedly.  Plato said: “Let parents bequeath to their children not riches, but the spirit of reverence.”  Many parents seek out ways to be known and connected to their children beyond death; for their bonds to go on in healthy ways that help their children be emotionally resilient. Rachelle says, “After my daughter’s birth I set up an email account for her and I regularly sent letters and photos to that account, documenting our time together in the early childhood years that she may one day forget.  It’s my plan to give her the password to this email account when she turns 18, a beautiful legacy of her childhood and her family to hold her up as she makes her own way in the world. Without a life partner or a friend who knew every detail of our lives, it would’ve been either difficult or impossible for a person to find things that were important to me as a parent.  What would happen to her password protected gift email account?  Who would know where to find the contact details of my daughter’s paediatrician and her health records? That sowed the seeds of an idea that there must be a solution where you could organise everything in one safe place that would absolutely be accessible to my executor, and the trusted loved ones who I want to be involved in resolving my estate.” Launched last year as a ‘first’ in South Africa, Heritage Vault is a digital solution that enables you to store all of your important estate information securely and makes it easily accessible to your appointed confidants in the event that you may die or become incapacitated.  Everything your executor or nominated loved ones may need will be safe in one place and perfectly organised in 13 easy to find categories of data. Rachelle says, “It’s important to note that parents must still create a valid Will specifying guardianship of their child, and that must be available to your executor in its original hard copy form.  However, you can upload a digital copy of it to your private vault and simply specify exactly where to find your original Will.  All your passwords can be securely stored, which is vital since so much of our life and our finances is managed through digital channels.  All your customer accounts with full contact details can be listed so that these can be cancelled quickly avoiding money draining unnecessarily out of your estate.” The process of populating your Heritage Vault, which you can do in your own time, guides you intuitively through every aspect of comprehensively planning for your passing. It includes leaving instructions for what happens to your pets and what you want done with your social media accounts.  A category in the vault called ‘For My People’ empowers you to upload private and personal messages to your children that you feel will be valuable to them in the event of your passing. Rachelle says, “Our users find peace of mind in planning and organising for any eventuality.  Their Heritage Vault brings an important additional layer of security and safety to their family.  It is a living database that they can update and revise as details change and as they and their beneficiaries reach different life-stages, which is so important when you have growing children to look after.”

March 3, 2023

KEEPING UP WITH THE JONESES’ CAN LAND YOU IN A FINANCIAL FIX

Peer pressure does not only affect impressionable teenagers – we all have an innate urge to evaluate our progress against those around us. As parents, we also want the best for our children, often going beyond our means to make this happen. Sending your child to one of the best public schools in the country can set you back R63 000 per year while elite private schools can cost north of R200 000. Trying to keep up with the Joneses can land you in deep financial difficulties. Adopting a few financial hacks, you can still give your children great opportunities without compromising your financial wellbeing. Ayanda Ndimande, Business Development Manager of Retail Credit at Sanlam says, “As parents, we are always on the lookout for the best ways, tools, and resources to raise our children. For first-time parents, this may mean feeling that you need to have the most expensive pram, the latest toys, must-have gadgets and clothes, only for the child to outgrow them in a few months. By reorientating that desire toward your child’s long-term prospects, you can help build a strong financial foundation that your children can use as a launchpad for their lives.” Taking advantage of these three simple tips can help you avoid debt traps, achieve your goals, if you feel as though you need to keep up with the Joneses.   Build a Healthy Relationship With Your Credit Score: If you’ve ever taken out a loan, registered a bond, applied for a credit card or even a cell phone contract, you’ll most likely have a credit score. Your score tells prospective lenders how much of a ‘risk’ you are in terms of your past debt repayment behaviour. It looks at your transactional records and gives you a score, ranking you as low, medium, or high risk. Your credit score is a living number that fluctuates depending on your debt repayment behaviour. The Sanlam Credit Dashboard allows you to do a free credit score check and credit coaches can help you to better understand and manage or improve your credit score. The pressure to keep up appearances can often lead people to take out loans or dip into their credit. Not all debt is bad but going into debt should be carefully considered and geared toward useful long-term benefits. Ndimande says, “Whilst trying to do the best for our kids, it helps to also have a longer-term view. Think about the financial position you want to be in in the future. Knowing your credit score will help you do this.”  Talk to Your Kids About Money: When we try to keep up with our peers, friends or colleagues we often end up spending without thinking and going deeper into unplanned debt. Your children learn life-long financial habits – both good and bad – by watching the way you manage your money. By speaking to your children about money, helping them track their spending and open savings accounts, you can equip them with the tools to be able to buy their toys and be more considerate when they do. The Sanlam Savings Jar app is a great way to do this.  Remember That Social Media isn’t Real Life: While it is entertaining, remember that social media is often a sanitised and curated view of people’s lives. Through the power of angles and filters, it is very easy to make things seem grander than they are. We often know little about people’s finances when we look at their posts. It is also important to be kind to yourself, we all have different goals and will take different financial paths to reach them. Ndimande concludes, “Not owning the latest gadget or sending your child to a school that costs a quarter of a million rand a year is not a reflection of your success. We all have different lives and needs and comparing ourselves to others can negatively affect our mental health. Shift your focus towards long-term goals and put the necessary plans in place to make them a reality.”

December 6, 2022

Are you financially prepared for a crisis?

Every one of us has lost sleep at some point over the possibility of experiencing a significant adverse event that could have an impact on our stability and security. Evolution has ingrained it on us that we need to always be prepared for calamity to strike. In our modern world such an event might include losing your job unexpectedly, becoming ill or even being involved in a car accident. While none of us could predict these types of events, we can deal with them far better if we’re well prepared. Edwin Theron, CEO at digital insurance provider Sanlam Indie says: “You might be doing a great job of preparing your financial future, but a significant accident or other unanticipated occurrence could turn your financial fortunes upside down.” He says that planning for a disaster, whether financial or health related, is just as crucial as saving for the future. Below, we’ll discuss five of best strategies to get ready for a financial emergency: 1. Emergency funds Saving money is difficult to prioritise, but we are all aware that doing so is necessary to be ready for a personal financial emergency. Automating your savings is the simplest approach to guarantee that you do it each month. You might be tempted to dip into your savings every now and then, but you should really aim to keep an emergency reserve for when a money crisis hits. Note: A common rule of thumb is to aim to have about 3 months’ worth of salary available as an emergency reserve 2. Make a budget Many people who have struggled with budgeting see it as a burden that prevents them from enjoying life. A budget does not ensure that you will spend less money, but it can help you decide and give you relevant information that can aid in deciding how to spend your money. You can have a plan for where every rand is going if you set limitations and keep track of your spending. After that, make any necessary modifications. Perhaps you discover that sticking to a budget results in a little extra each month; this may be a sign that you can comfortably increase your monthly savings contribution. 3. Reduce monthly expenses Keeping a handle on your monthly expenses should be a priority even outside of a crisis. Perhaps you have a habit of keeping the lights on in unoccupied rooms or letting the heater or air conditioner run while you aren’t at home. Consider your cell phone plan, auto insurance, memberships, subscriptions, and streaming services. Even though they might not seem like much on their own, when added up, they can significantly lower your monthly spending and make you more resilient when disaster strikes. Note: Consider more affordable plans for your needs by getting in touch with the providers of your plans and comparison shopping with other providers. 4. Manage your debt Debt can pile up quickly, especially high-interest debt like credit cards. Make a strategy to pay off your debts, such as card balances, personal loans, and student loans, so that you may put that money in your own pocket. Always make the minimum payments on all accounts to maintain your credit and keep your accounts open. 5. Get insurance It can be easy to put off getting any kind of insurance as it may seem like an additional expense and an unnecessary amount of messy paperwork. Insurance is designed to help alleviate pressure in the case of adverse events though and helps you have sufficient reserves when your own savings aren’t sufficient. This is especially for large life events like a serious illness or a bad accident. The Sanlam Indie Plan is the easiest way to find out what life insurance you need, and don’t need, in under 10 minutes. Note: Always ensure your needs are understood so you get the right cover at the right price. Nobody can forecast a personal financial disaster, but planning can limit its effects and lessen the stress and anxiety that comes with it. By setting aside money and controlling your debt and income, you can be ready for both anticipated and unforeseen expenses. You’ll be able to exhale a little easier the next time a financial crisis strikes. www.sanlamindie.co.za

December 2, 2022

When Should You Review Your Life Cover?

Your life changes, sometimes quite drastically, if we just think about the last two years for instance,, and your insurance coverage should adapt to the new circumstances, making it crucial to re-evaluate your life cover at each key point in your life. Life insurance is part of your financial plan and just like a GPS reroutes you when things change on a trip, your financial plan and your life insurance coverage should also be updated to take account of new routes or events in your life.Edwin Theron, CEO at Sanlam Indie, says: “Although your policy will renew routinely, a policy you may have bought five or ten years ago might not provide you with enough benefits for your current demand.” He takes us through five possible life events that would require you to review your life cover. 1. Getting Married Many couples forget to build a solid financial foundation for their marriage. When it comes to preparing for your new financial life as a married couple, life insurance is one of the puzzle pieces. The abrupt and unexpected loss of apartner can be extremely expensive as well as emotionally distressing, especially in households dependent on both incomes as is the case for most couples these days. A surviving partner may use the death benefit from a life insurance policy to cover living expenses, funeral costs, or any outstanding debts, such as a mortgage or student loans. 2. Getting a Promotion Your hard work, long hours and dedication have paid off!  Before you know it, your family will be accustomed to your new income and the lifestyle it allows. Revisit your life insurance coverage when you receive a job promotion and a bigger paycheck. This is particularly crucial if you have income protection, so that you can be sure your income is sufficiently protected if an unexpected disability prevents you from working even just on a temporary basis. 3. Kicking the smoking habit We all know that smokers pay more for life insurance than non-smokers, so if you have stopped smoking, your insurance company might lower your rates because of your new status. Remember that most insurance providers will ask you to sign a non-smoker declaration and reserve the right to request smoking tests that gauge the amount of cotinine in your system. There is no such thing as a “smoker-free zone” when it comes to insurance, so it’s best to tell your insurer the truth. 4. Buying a house Being a homeowner is exciting! However, it becomes pricier when you account for your mortgage, homeowner’s insurance, property taxes, maintenance, and upkeep costs. Life insurance is an important consideration when buying a home because it’s likely to be both your biggest financial commitment and asset. One of the top five reasons people get life insurance is to settle mortgage debt if something happens to them. It is essential to review your life insurance so your family won’t have to leave their home in the event of the unexpected, especially if you or your partner couldn’t afford homeownership bills on their own. 5. Having a baby One of the largest changes you can go through is the arrival of a new family member, whether it’s your first or second child. Given the shift, most individuals will increase their life insurance coverage so that, in the event of their death, their loved ones would have enough money to support them until they are financially independent. As a general rule of thumb, it’s a good idea to review your life insurance at least once a year. Some digital insurance platforms can help guide you through the process if you don’t have a broker. The Sanlam Indie Plan, for example, can help you work out what cover you need – and don’t need – in just a few minutes online.

November 8, 2022

5 TIPS TO AVOID SCAMMERS WHEN TAKING OUT FUNERAL COVER

As we navigate through these challenging economic times, making sure our loved ones are taken care of financially becomes more and more important. This includes anything from ensuring they have a simple savings account, to the big guns like life insurance and funeral cover. Sadly, when it comes to funeral cover, scammers are operating everywhere, and many people are falling victim. For the most part, these scams offer supposedly cheaper and more convenient funeral cover, and they target people who are emotionally exposed at the thought of a loved one passing on.  Funerals can often set your family back as much as R60 000, so it’s vitally important that you have suitable insurance in place to assist you with the costs. There are a few ways to make sure you’re getting a good deal. The following tips will help with assessing suitable funeral cover, enabling you to know what you’re paying for and what you’ll get should the worst happen:   1. Deal with the right person and a reputable provider Funeral cover has always been seen as a soft target for fraudsters and they usually pretend to be employed by a known insurance or financial services provider. In fact, people often claim to be scammed by close associates like relatives or neighbours! If you are unsure, the person or service provider should supply you with the details of the company that they are representing and their registration with the Financial Sector Conduct Authority (FSCA). If the alleged insurer does not want to give you that information, see that as a red flag and just walk away.  2. Request a policy schedule Once you have taken out a funeral policy it is customary for you to see the policy schedule as confirmation of cover. The provider is obliged to provide you with this information. A reputable insurer must be transparent and provide all the relevant documents that will give you the assurance to know what is included in your policy and what to do when it’s time to claim. Never accept anything you don’t understand or agree with as providers are compelled by legislation to ensure that their products are easy for clients to understand. 3. Funeral cover need not break the bank Your service provider can tailor your cover to suit your budget and personal requirements as one policy size does not fit all, so be sure to discuss all options and plans and don’t feel pressured to take on the first option offered. 4. Do your own research When it comes to legal and financial documents, it’s sometimes easier to avoid the jargon and reading and to just take someone’s word for it. In fact, when it comes to insurance of any kind it’s absolutely critical that you read the fine print yourself and understand clearly what the terms are. Look specifically at waiting periods, exclusions, and the definitions of extended family member relationships that you might have covered.  5. Life cover vs Funeral cover It is a common misconception that life and funeral cover are one and the same thing. Life cover aims to assist those you leave behind with financial stability and security. Because it’s underwritten, it often offers more cover. Funeral cover aims to simply provide your loved ones with the means to deal with the immediate challenges of your passing and normally pays within a few days of the claim being submitted. As with everything in our lives, you get what you pay for, so be sure to do your homework and choose a funeral cover that will give peace of mind and that you understand. “Life is so unpredictable and having to deal with the loss of a family member is a painful time and the concerns about the costs of a funeral, and beyond, can add to the weight of an already difficult moment. WithSanlam Indie Funeral Cover, you can make sure that you and up to 20 of your family are taken care of and spared from the financial vulnerability that comes with burial arrangements. If you’re willing to answer a few more questions, Sanlam Indie’s Life Cover might offer you more cover, while still including a quick pay out portion for immediate funeral-related expenses.” – Edwin Theron, CEO at Sanlam Indie www.sanlamindie.co.za

October 11, 2022

No magic pill for money migraines but a budget may ease the pain

The dual pressures of rising interest rates and increasing inflation are adding to already stressed consumers’ financial headaches and while there is no miracle cure, something as simple as a household budget may ease the pain.  Even in wealthy economies such as the United States, studies suggest that less than half of households have a budget. While there is no recent verifiable research for South African indicators such as financial stress, the levels of concern about money suggest that the figure here is much lower. “Reasons people don’t budget may be that they’re in denial and are afraid to look too closely at the state of their finances. They might think it’s too complicated or difficult to draw up a budget, or because for some people budgeting, much like dieting, has negative connotations” says Yaasin Nordien, COO of DirectAxis Loans. “Rather than thinking about a household budget as a difficult, daunting, boring or constraining exercise, consider it as a tool to enhance your future financial security.” Yaasin says that setting a budget and sticking to it puts you in control of your money, rather than the other way around, and doing so will help to relieve financial stress. The other benefits of budgeting include: It helps you prioritise and focus on setting and reaching future financial goals rather than just living from salary to salary It discourages you from spending money you don’t have It encourages you to track income and expenses, to identify and stop unnecessary spending and save money It allows you to manage debt repayments, avoid bad debts and maintain or improve your credit score (for more information on the benefits of a good credit score visit:www.directaxis.co.za/make-a-plan/why-your-credit-score-is-important-and-what-to-do-about-it )  It helps you spot potential problems and stop them from escalating Drawing up a budget will take a bit of time but isn’t difficult. You can use a spreadsheet, one of the many online budgeting tools such as www.directaxis.co.za/make-a-plan/set-financial-goals-and-manage-your-finances-like-a-pro or a simple piece of paper, depending on which you prefer. On the left side list all your income. As well as what you get paid, also include any earnings from rentals or side hustles. On the right, use your bank statement to list all your expenses. This will immediately show where you might be able to cut or reduce spending. It will also enable you to put parameters in place, such as determining monthly spending limits and how much you may be able to save each month. If you are able to save some money towards achieving your financial goals, include it in your budget as a fixed expense. The same way a guard dog warns you about danger before you see it, keeping a close eye on your budget will show you where there might be risks. If things start to look a little tight you can do something about it before it becomes a problem. Yaasin says although your first budget probably won’t be perfect, revisit it to see how you are progressing and refine it as you go. “It’s amazing how this simple exercise, which probably won’t take more than an hour, can be so empowering, insightful and help you reduce some of the stress of worrying whether your money’s going to last for the month.”

October 6, 2022

Shopping showdown: which retailer wins at the tills?

The high cost of food is a subject on everyone’s lips. Reasons for the increases range from the war in Ukraine to the weaker rand, and natural disasters such as the floods in KwaZulu-Natal – a province in which many South African factories are situated. JustMoney, which helps South Africans to educate themselves about managing their personal finances, has compared the costs of 13 basic goods at three leading supermarket outlets. The personal finance portal also provides some handy tips on how to thrive in the supermarket aisles during these tough economic times. Last year, JustMoney examined the cost of 12 basic food items at three major retailers – Checkers, Pick n Pay, and Woolworths. This year, the survey included a 13th item – cooking oil – the cost of which has risen due to the factors noted above, in addition to a mismatch between supply and demand, and unnecessary stockpiling. Pick n Pay ranks as most affordable While the cheapest shopping experience last year could be found at Checkers, this year the position goes – only just – to Pick n Pay.  By way of example, their 16-piece uncooked chicken packs cost R83.82 on the day that JustMoney shopped, versus R124.18 for a similar item at Checkers and R186.28 at Woolworths. A 2.25 litre bottle of Coca-Cola at Pick n Pay cost R13, compared with R17.99 at Checkers and R20.99 at Woolworths. The 2022 items included one of each of the following: A loaf of white bread, a small pack of bananas, a 2.5kg bag of sugar, 80 Freshpak rooibos teabags, one litre of long-life milk, two litres of cooking oil, a 410g tin of baked beans, nine rolls of toilet paper, a 2.25 litre bottle of Coca-Cola, 16 pieces of uncooked chicken, a 2kg bag of potatoes, a 2kg bag of white rice and 2kg Sunlight 2-in-1 washing powder. Last year, the cost of these household baskets came in at R368.71 at Checkers, R411.99 at Pick n Pay, and R442.34 at Woolworths. This year, including the addition of cooking oil, the totals wereR519.71 at Pick n Pay, R521.06 at Checkers, and R624.16 at Woolworths. “Our advice to consumers is to roam the aisles across supermarket chains, or make comparisons on the shopping apps, as there are plenty of discounts and specials to be found,” says Shafeeka Anthony, marketing manager of JustMoney. Checkers scoops best loyalty benefits While Pick n Pay Smart Shopper offered the best benefits in 2021, this year the accolade went to Checkers. Major savings were available immediately when swiping an Xtra Savings card.  A nine-roll Rose Collection toilet paper pack was thus reduced from R69.99 to R59.99, two bottles of 2.25 litres of Coca-Cola went for R30.99 (usually R17.99 each or R36 overall), and a 2kg bag of Spekko white rice came in at R24.99 versus R32.99 without an Xtra Savings card. Woolworths ranks first for best shopping experience Once again, Woolworths ranked highest in terms of shopping experience. The stores are designed for comfort as much as convenience, and products are visually appealing.  It also helps that café-quality coffee can be had in-store – and for only R23 when using a WRewards card, versus up to R40 for a similar coffee elsewhere.  How loyalty cards boost affordability JustMoney’s tips for scoring extra cash are as follows: Checkers: Save on more than 1,000 products each month by swiping your Xtra Savings card. These discounts are clearly marked in store, and you save straight away at the till. Pick n Pay: Swipe your Smart Shopper card on anything you buy and earn a point per R2 spent. The more you swipe, including at partners such as BP, the more points you accumulate, which you can spend in any Pick n Pay store. Woolworths: Voted Best Loyalty Programme of the Year at the International Loyalty Awards, this programme provides up to 10% instant savings on over 1,000 specially marked food, fashion and homeware items. The more you spend, the higher your tier and the greater your rewards. Additional Green Rewards apply on eco-friendly products. These findings show that all is not lost for local grocery shoppers. The main supermarkets are reaching out to consumers with store-card specials, combo deals, in-house items, and low-cost brands that are new to market. JustMoney has also searched out special deals on items ranging from restaurant meals to fun activities for children. Check out the JustMoney deals section for value-for-money offers. “It makes such financial sense to become a savvier shopper, comparing costs on similar (if not exactly the same) items, adding up rewards on loyalty cards, and calculating how much it costs to buy in bulk. These calculations, and the result of the latest JustMoney survey, reveal where the best savings can be found,” says Anthony. “You can also save money by purchasing food and beverages online or via an app. Benefits include fuel savings, parking cost avoidance, fewer distractions to tempt you, and the convenience of using a digital platform. Look out for website specials and discounts on items that you won’t find in physical stores.” Read a JustMoney article on costs and advantages of online shopping.

July 1, 2022

Estate Planning: Caring For children with special needs

Proper estate planning is one of the most important things you can do for your children. Not only does it spare them the anxiety of having to tussle over your estate while mourning your loss, but it can also serve as a final parting gift from one generation to the next. Despite this, 70% of South Africans still do not have a will in place. This is especially concerning for the parents of the roughly 3 million South Africans who live with disabilities.  Louise Danielz, Chief Operating Officer of Sanlam Trust says, “Regardless of your income bracket, it is important to get a professional to help you draft a will. For parents who have children with serious disabilities, estate planning is even more crucial as these children may not ever be able to work and provide for themselves. In these scenarios, trusts are key to ensuring your loved ones are properly provided for, for the rest of their lives, should you not be there to do so in person.” Providing for your disabled beneficiaries after you are gone The most important thing about planning for your child’s future in the event of your passing is making sure that their unique needs are considered. Putting measures in place while you are still alive, and understanding the practical implications of those arrangements, is very important. Danielz suggests doing the following as soon as possible: Ensure you have a valid will: Passing away without a valid will that makes provision for your minor children runs the risk of having their inheritance paid over to the Master of the High Court until they turn 18. This could potentially put their standard of care at risk Nominate a guardian for your minor child(ren): Choose someone you trust to carry out your wishes and care for your child in the best way possible. This can become tricky and time consuming if you have not made adequate plans or had the proper guidance. Above all, get expert advice: If you do not do adequate planning, funds due to minor beneficiaries could be paid to the Master’s Guardian Fund. To avoid this, it is best to set up a testamentary trust in your will to cater for them. Why you need a trust Having a trust is key if you want your estate to be administered, managed, and executed in the best way possible for the beneficiary. Being part of a trust ensures that a dedicated administrator, in conjunction with an elected guardian, acts with due care and diligence in administering the funds in their capacity as trustees. This means that the administrator will consider the maintenance needs of the beneficiary, engage with the guardian, and invest the funds appropriately.  Danielz says, “With Sanlam Trust, a dedicated administrator is appointed to engage with the guardian, so that they work together within agreed guidelines to take care of the beneficiary’s immediate and future educational needs if possible. If there is a need to consult with a caregiver, for example an occupational therapist, to make the best decision for the beneficiary, then this will be done.” With the right planning, parents can take care of their disabled loved one long after they have passed on. Danielz concludes, “Planning gives you peace of mind and it also creates continuity and support for your loved ones. It is all about understanding what you want and how this can be achieved.”

June 6, 2022

How much money do you need to survive?

With the rapidly rising cost of living, it may not be clear how much money South Africans need to survive, both while earning a living and in retirement. JustMoney.co.za, which helps South Africans to inform themselves about personal finance, researches some basic expenses and their current costs. There’s also general advice on stretching those rands and staying afloat.   Gareth Price, founder of both Cloudworx and Investmint, and CFO at BackaBuddy, says that people have different ideas about what it means to survive financially. He explains that, in general, households should prioritise the basics, such as food, rent, transport, electricity, education, burial insurance, debt repayments, basic hygiene and medical products. He believes that, on average, these costs add up to R7,000-R9,000 per month.  “If you want to move into the middle class, school fees and rent become more expensive, and you may choose to purchase a car rather than relying on public transport. On top of this, you may take out medical aid and perhaps invest in a savings plan. Here, you’re looking at an income of between R35,000 and R45,000 per month,” says Price. He notes, however, that the vast majority of South Africans earn less than R3,500 a month, with only the top 1% earning around R45,000. To put this into context, a state old age pension grant offers a maximum of R1,890 per month, or R1,910 if you’re older than 75 years. Putting a value on retirement Christelle Louw, advisory partner at Citadel, says that to retire sustainably and securely in South Africa, you will need at least 20 to 30 times your required annual expenses as accumulated capital over your lifetime. According to Statistics South Africa’s employment report for the fourth quarter of 2021, the average worker’s salary in South Africa is R23,982 per month. This amounts to R287,784 annually, which would require a minimum of R5,755,680 (R287,784 multiplied by 20) for a sustainable retirement.  Louw adds that financial independence is only achieved by 6% of the population, and that 94% of South Africans will not be able to sustain their income from their savings. This means that their lifestyles will have to be adjusted downwards during retirement, such as living in a smaller home. Shafeeka Anthony, marketing manager of JustMoney, says that the Covid-19 pandemic, job losses and price hikes for household goods and services have exacerbated many people’s already perilous financial situations. South Africans have numerous concerns, from security, electricity and transport, to quality education for their children. “It is absolutely vital to assess your financial situation honestly, and to put a plan in place. Getting back to basics and focusing on essentials is the only way that most people will cope with their present needs, let alone growing  investments for when they can no longer work.” Anthony offers the following advice, based on tried and tested fundamentals: 1 – Work out a budget: Track money coming in, versus your regular monthly bills and variable expenses – those that change from month to month. Bank and credit card statements are a helpful place to start. Soon you will see where your money goes, and where you can cut back.  2 – Forget brand loyalty: Draw up a weekly shopping list and buy your supplies where you will get the best value. Try out a different grocery brand, you may be pleasantly surprised at the savings. Avoid popping into convenience stores for a few items, this comes at a price.  3 – Reduce your debt: Firstly, debt is acceptable if it takes a form such as a home loan to purchase your own property. Debt is bad it you borrow money to buy the latest gadgets. If more than a third of your income goes to paying your debt, and you find yourself taking out loans to get through the month, get help before a legal process is started against you. Professional debt review companies will advise you on debt relief and protection from creditors. 4 – Save: It is essential to save, even if it is only a small amount every month. For example, stop buying coffee take-outs, and cancel a gym membership that you hardly use. Allocate these amounts to a separate account, and you will be surprised at how these add up over a year. 5– Build an emergency fund: An emergency fund of at least three months’ income will help mitigate the need to take on debt, or liquidate investments during cash-strapped times. 6 – Check your medical aid: Read over your medical aid plan to ensure it still meets  your needs. Inform yourself about, and use, the benefits. 7 – Maintain Insurance: It’s always best to prepare for life’s unexpected events. Shop around to get the best deal, but do insure your property and vehicle with a reputable company that should pay out when required. 8 – Grow your income sources: Many people are taking on additional part-time work, from book-keeping to teaching English. Online learning has also made it easier to build your skills and qualifications. Explore new ways to boost your income. 9 – Stay money-motivated: Checking how well you manage to stick to your budget at the end of every month is  the most important part of the exercise. Plan for a little treat if you come in on target. “When we have become used to living a certain way, and enjoying a certain standard of living, the idea of making changes may feel very uncomfortable at first,” says Anthony. “Taking on debt or eating out regularly may seem completely normal. However, making some changes  is the only way that many people will be able to cope with the rising cost of living, and still have funds left over for retirement. “When planning how to adapt and trim expenses, it helps if you think of the process as taking control of your life. Focus on your long-term goals. Being debt-free is great for your bank balance and your mental health and you are better positioned to realise your dreams.” JustMoney provides busy and digitally savvy South Africans with easy access to financial products,

June 3, 2022

How to help your adult kids to become financially independent

Many adult children in South Africa live with their parents, for both cultural and financial reasons. This can suit both parties for a time – but how do you encourage your grown-up kids to become self-sufficient when this is clearly needed? Are there ways to nudge them towards financial independence, both for their sake, and for yours? These are undoubtedly challenging times for young people. Many South Africans lack education, skills and basic means of support. Nearly two-thirds of young adults aged 15-24 years are unemployed, along with close to 43% of those aged 25-34 years. The pandemic and state of disaster have also affected those who were on the first rung of independence. Traditional students’ jobs such as waitering, bar-keeping and babysitting fell away, while young people already in the job market faced retrenchment. Home became a welcoming haven and helped many to cope. While keeping these difficulties in mind, how do you encourage your adult children to leave the family nest when the time comes? JustMoney.co.za gives some advice on how to put adult children on the path to financial independence. 1. Explain your motivation: Clarify that you are encouraging your kids to become self-sufficient because this will ultimately help them in life. You are doing so because you love and care for them. 2. Set a deadline: If your adult child has recently qualified, it helps to set a date for when you will no longer pay for their phone bill or provide a monthly allowance. This gives them time to prepare emotionally and practically and is preferable compared to abruptly cutting off their money supply. 3. Put their skills to work: If your child already has a skill, such as coding, they need to make an active effort to land a job, such as web development. They can build confidence and networks by contributing to open-source projects and joining hackathons, usually hosted by tech companies, to collaborate with other programmers over a short period on a project. 4. Teach budgeting: Involve your adult child in the household planning so that they are fully aware of what it costs to run a home. Young adults are often more technically adept than their parents. There are plenty of free budget calculators and other financial tools online. 5. Pass on basic savings and investment rules: Teach children about key concepts such as compounding, so that they understand how investment earnings are reinvested over time to generate more money. They can also create a mock investment account on an app. Read a JustMoney article about investing in unit trusts. 6. Cultivate positive values: Research shows that fostering an attitude of gratitude helps one to feel more positive and upbeat. Volunteering their time teaches children the benefits of helping other people, and reminds them of the many advantages they enjoy compared to those who are less fortunate. 7. Set goals: Encourage your children to think about their goals and what is important to them. What lifestyle do they aspire to and what practical steps do they need to take to get there? Discuss good role models and how these people have achieved their dreams.  Find out more about saving for a deposit on a car. 8. Prepare for your own retirement: Actions speak louder than words. Discuss your own hopes for the future and how you are preparing for when you are no longer working. Ensure that you have an up-to-date will. Learn how inflation impacts retirement savings. “A parent’s duty to support a child does not stop when they reach a particular age. They may be older than 18 years but still studying and gaining a qualification. A parent is obliged, for example, to pay maintenance until a child is self-sufficient, and we are all aware of the rising cost of living.” says Shafeeka Anthony, Marketing Manager of JustMoney. “Nonetheless, becoming financially independent brings greater confidence and autonomy for the adult child. It also enables the parents to prepare for when they can no longer work. It is never too early to start educating a child about money matters and, in due course, setting boundaries. While it’s acceptable to help adult children occasionally or on a short-term basis, the bank of mom and dad cannot remain open forever.”

May 9, 2022

A Practical Way of Teaching Children about Money

Here is an easy-to-manage tool to help your children learn about money?  Each time they receive money from chores, holidays or gifts, they should break up the money by percentage and place the amounts into envelops.  Here’s how to do it: Purchase 6” x 9” yellow mailing envelopes and place them in a 2 or 3-ring binder.  Soft plastic zip-up pencil cases that are made to go into a binder also work well. The exact size doesn’t really matter, as long as they are big and strong enough to contain notes and coins. The first envelope should be titled TITHING or DONATIONS and should have 10% written on it.  Making this the first envelope will teach your child that giving money away to others in need comes before satisfying personal desires.  Any nonprofit organisation could qualify to be the recipient of this money and it works best if your child can make that choice (with your guidance of course).  Allow them to decorate this envelope with images that represent the organisation that will receive the money. The second envelope should be titled SPENDING or MAD MONEY and should be marked with 20%.  Money in this envelope could be designated to be used anytime that the child wants to spend money, for example, when going on shopping trips with an adult or when the ice cream truck is in the neighbourhood. The third envelope should be titled SHORT TERM SAVINGS and should be marked with 40%.  Money placed into this envelope can be designated for more expensive items the child would like to purchase within a year or two.  Examples might be: a new toy, a game cartridge, a bicycle or even set aside as money to be spent on a school trip.  Allow your child to draw or cut out a picture of the item he or she is saving for and put the price of this item on the envelope to act as the target amount. The fourth and final envelope should be titled LONG TERM SAVINGS and have 30% written on it.  Money saved in this envelope should be removed and banked on a monthly or quarterly basis.  I suggest there be no target for this except to save and record the deposits as they are made.  You may even want to make a rule that this money can only be withdrawn with the parent’s permission.  It also works best to allow your child to physically make the deposits at the bank with your help. Implementing and maintaining the process needed to manage this new savings book can be a fun and rewarding experience for both the parent and the child.  Every time the child receives money, it should be broken down by the percentages and deposited into the four envelopes.  At the very start, you’ll want to build a cash box and store it away, ready for making change for the child each time he or she receives money.  The parent should be responsible for keeping the book at all times.

April 8, 2022

THE STATE OF SOUTH AFRICANS’ MENTAL HEALTH- And what we wish our pre-pandemic selves had known

Financial stress is taking a heavy toll on South Africans, with about 54% unable to make their money stretch to month-end. It is impacting their own mental health, along with constant worry about the health of their loved ones. These findings in a recent Sanlam survey conducted by Ova to You, highlights the imperative to focus on factors within our control – in particular the need to make the best possible financial decisions in very trying circumstances. The study was conducted amongst 1200 South Africans as part of Sanlam’s campaign – Letters to My Pre-Covid-19 Self and it asks people to reflect on what they wish they’d known or done prior to the pandemic. Farzana Botha, Segment Solutions Manager at Sanlam Savings, says, “We’ve all gone through this major life event together and it’s changed many of us in profound ways. We can’t underestimate the toll it’s taken on our mental health. We’re likely to keep seeing the impact of this for years to come. The survey showed that above anything else, most people wish their former selves had saved more. It really brought home the impact money has had as a stressor on mental wellbeing.” Here are some of the key findings from the survey, showing how South Africans are feeling and what they wish they could write to their pre-pandemic selves: Financial stress has reportedly had the most major impact on people’s mental wellbeing: A whopping 57% of participants cited financial stress as having a huge effect on mental wellbeing. This was followed by worry about their own and loved ones’ health (44%), and all the uncertainty brought about by the pandemic (38%). Financial stress hit young people the hardest: Those aged 18-24 were most mentally impacted by financial stress – and younger women were the hardest hit of all. Older people more concerned about the state of the nation: Interestingly, older individuals were more worried about the economy and state of South Africa. They were also more impacted by the negativity of the news. Loss and grief impacted all ages, equally: 24% of people cited loss and grief as having a mental impact; 22% said isolation and loneliness. Childcare and family stresses most felt by women: The 20% of people who listed childcare and family responsibilities as having a mental toll were, predictably, less likely to be male and usually more likely to be aged between 25 and 39. In a country where 41.8% of households are female headed (Stats SA: 2019) and close to 70% of black children live without biological fathers at home, this is unsurprising and shows the severe stress many women are feeling. It was clear that the pandemic made many rethink their physical and mental wellbeing. During Covid-19: 21% of people went on prescription medication to help with stress and anxiety 21% invested in online and physical exercise options, like a gym membership or yoga 12% sought counselling or therapy Others went on health supplements and turned to natural remedies, along with meditation and mindfulness About 35% of respondents said they always make time for self-care (self-care was undefined). Most of these were younger men with an income of less than R10 000 a month. Close to 59% said they make time when they can (likely to be older: 40+ years), and 6.7% said they never make time.  In terms of what they’d write to their pre-pandemic selves about what they’ve learned about wellbeing, some of the responses were: “That everyone is susceptible to any manner of mental health issues, especially anxiety and depression. I’ve learned to seek psychological assistance in the form of therapy to assist me in managing anxiety in these trying times.” – Male, 30-39 years old, Gauteng, HHI R30k+ “I’ve learned that I must start taking my mental health seriously and avoid anything that could affect it.” – Female, 18-24 years old, North West, HHI Less than R10k Overall, most people wanted to tell their pre-Covid-19 selves to ‘take time to enjoy the simple things in life and the moments with loved ones’, as well as to ‘manage your finances better and start an emergency fund’. Botha says, “We thank everyone who participated in the survey for being so open and honest. It takes tremendous courage to be so vulnerable. It’s clear many of us are going through so much right now and we need to create a culture where people feel comfortable talking about what they’re experiencing.  “It’s also obvious that financial stress is having a huge toll. Sanlam is committed to helping people live with confidence. As part of this, we aspire to empower South Africans to have the knowledge necessary to go after their goals and make smart money decisions to live their best lives. We are here to help you make the right decisions for yourself and your family.  “We have many advisers and tools on hand to help you come up with an achievable, holistic plan. We’re here for you. It’s never too late to turn a situation around. You’re not alone.”

November 18, 2021

Saving Can Be Child’s Play

As South Africans, our experience with money is probably as diverse as our population. Unfortunately, the significant gaps in understanding basic financial concepts continue to be a barrier to living the lives we deserve. This makes taking a one-size-fits-all approach to financial education as effective as trying to build a house using only a hammer. While access to financial infrastructure is one way to broaden socio-economic inclusion, another is addressing the knowledge gap in ways that work.  This needs to be a nuanced approach that’s sensitive, sustainable, and accessible. It needs to empower people to live with confidence, go after their goals and believe they can build a better life. Ideally, it should start in childhood, but be an ongoing journey. In fact, the earlier in childhood we can start, the better. Starting Young It has long been known that play is one of the most powerful ways in which children learn. This is what makes the Sanlam Savings Jar app such an innovative and apt solution to the question of how to teach children sound financial lessons. In the app, which essentially gamifies the idea of saving, players become young dragon masters embarking on a fantastical quest. The more they save, the more their mystical dragon grows. Mariska Oosthuizen, Head of Brand at Sanlam, says, “We know that gamification is a powerful means to educate young people. The Sanlam Savings Jar breaks down basic financial concepts, like planning, goal setting, needs versus wants, and appreciation of money and how to earn it. It’s critical to teach children these concepts early on as habits are formed from as young as seven.” By making the idea of saving fun, whether for a rainy day or a sunny one, much of the stigma and discomfort is removed from conversations about money. A key first step in closing the financial literacy gap in South Africa involves families being able to talk freely about the subject. Turning it around An alarming finding comes from the Organisation for Economic Co-operation and Development, which ranked South Africa the worst of 30 countries for financial competency in 2018. This worrying reality need to be addressed urgently and head-on. Teaching children how to plan, especially where money is involved, starts to empower them to live with confidence. Upskilling their financial literacy will do exactly this and help South Africa as a nation, move away from some of the troubling tendency toward over indebtedness.  Here are a few ways you can help improve your child’s financial literacy:  Teach them about managing debt: Debt is a tricky one to teach little people about. Offer to ‘advance’ your child the money they need for a desperately desired toy, but make sure they understand the ‘conditions’ upfront. Talk about what the toy is worth. Now, show them the impact of interest. By taking your loan now, they’ll have to ‘pay’ more for the toy in total. Work out a roster of chores they can do to ‘pay back’ the money. And make sure they know that if they don’t do the chores, they could lose their cherished toy! It sounds harsh, but it’s wise to teach these lessons to older children in the safe space of your home. Practice saving and investing for different goals: Ponies and Playstations don’t grow on trees but the money you need to buy them can be grown in a bank account. Through games like the Sanlam Savings Jar app your little one can take their first steps to becoming Baby Bezos. Give them financial confidence: Few things are as gratifying as the hands-on-hips confidence your mini me displays when they do something well. That confidence can be built with financial literacy too. Give them little savings tasks and reward them when they do these well. If it all goes according to plan then, in a few years’ time, they’ll have the financial confidence to start to build their best, independent lives.  

November 9, 2021

IN TOUGH TIMES, IT’S MORE IMPORTANT TO TALK MONEY THAN EVER

Most people’s expenses exceed their income. That is according to a recent poll by popular parenting platform ‘Momsays’.  Just 25.8% are managing to save consistently. More than 40% don’t save at all. Many families are feeling stretched and stressed right now, which makes it more important than ever to play open cards, pull together, and start having those important money chats. Having regular family ‘money dates’ is one of the best ways to set shared goals and get on the same page.  It’s super important to pull little people into the family financial planning. But try to do so in a way that makes it real – and less boring! Money talk can be so dry and small people’s eyes tend to glaze over easily. Try to make it as relevant and practical as possible. Mariska Oosthuizen, Head of Brand at Sanlam, says, “When you’re buying groceries, turn finding the lowest price for the same product into a game. Or, have a competition at home to see who can earn the most money from doing extra chores. Or sit together as a family and go round the circle and name a dream you each want to save for.” The Momsays Survey showed that South African families talk about money more than many may think. Oosthuizen adds, “Encouragingly, 91.3% of respondents said they speak about money as a family, with 32.8% doing so on a monthly basis, 20.6% weekly and 15.8% have daily discussions. “That’s really amazing. However, of those with kids, 51.8% of participants’ children were not saving.  There’s a real opportunity when kids are young to set them up on a solid savings journey for life. Our free Sanlam Savings Jar app can help kick-start this. It encourages ‘young dragon masters’ to embark on an epic savings quest. The more virtual treasure kids save, the bigger their ‘pet dragon’ grows! This is all part of inspiring little ones to live with financial confidence – now and in adulthood.” Goal setting is a pivotal part of learning to manage money. The survey showed that of the people who were managing to save, 51.8% were saving for their kids, 37% were contributing to an emergency fund, and 15.6% were saving for a house. Oosthuizen adds, “It can be a really special exercise to share these goals together. Happily, 67.2% of respondents said they do set shared financial goals as a family. Let your little ones know what you’re saving for and ask them what they’d like to save for as well.” Another big part of introducing children to finances is teaching them the value of money. Over half (54.8%) of the respondents said their last ‘big spend’ was on food, 11.4% said health-related items, and 8% their vehicle. Most wished they spent less money on bills (48.1%), 22.9% said ‘eating out’ and 6% said beauty buys. It’s important to be honest about these things and involve kids in the budgeting discussions so that they gain an understanding of what things cost. 45.6% of respondents said they never involved children in these chats.  Oosthuizen adds, “It’s so important to teach kids the difference between needs and wants. Take them through the budget and your expenses each month. It’s vital to let them see you enjoy your money and indulge in spoils occasionally. But it’s equally important to show the ‘opportunity cost’ of that. ‘If I put money towards this now, I’ll have less money for the other goal we’re saving for’. “The bottom-line is that it’s wonderful to make ‘money talk’ a natural, frequent conversation in your home. It takes any ‘scariness’ out of finances and it can encourage a real closeness. It’s special to celebrate big and small victories together. It’s also important to show kids how learning vital savings lessons in the tough times means manifesting good money habits in the ‘good times’ as well. That’s what a mind-set of abundance is all about.”  

October 7, 2021

MONEY LESSONS FOR LITTLE ONES FROM HOUSE KOLISI

7 year-old Nic Kolisi is saving for a car. Not just a remote control one; a real car as well! Although, having done the maths with mom, Rachel Kolisi, on how long he’ll need to save for him to reach his R100 000 target, he’s now having a slight crisis in confidence and focusing on the remote control one instead. The Kolisi family has been using the Sanlam Savings Jar app to get the kids to set goals and save for these. Rachel Kolisi says it’s never too soon for little people to learn these lessons. There’s a rule in House Kolisi. If you don’t work, you don’t earn. Kolisi says she knows that life is crazy, but it’s critical to schedule time to talk money with children. “Time is going and kids keep growing; the sooner they’re conscious of finances and spending, the better! Even if you just spend an hour a week talking about what they’re saving for and how, it makes a difference. I’ve found the Sanlam Savings Jar app really incredible for this. It helps parents have these conversations and it’s so interactive and fun for the kids as well.” Money talk is tough in our times Kolisi says that teaching kids about finances is a different ballgame today. “We used to get pocket money in our hands. Now, it gets deposited into a bank and you’re working with EFTs and cards… it’s much tougher to teach children the value of money. I’d get R5 a week, which used to be enough to buy a Chelsea bun back in the day. These days, it’s totally different. Which is why I think talking about money is more important than ever. It’s scary to see how few children – even adults – have any kind of financial savvy. Talking about money as a family  Kolisi says that the family talks about money and sets shared financial goals often, “We’re underway with a big move and there’s a lot of financial change in that. So, we’ve had to sit down and have a conversation about what the next couple of year’s looks like. We’re in our thirties, but we’re responsible for four children. One of our kids is changing schools and our older one is going into a hostel, which is another expense. So, every year we look at our income and expenses to make sure we’re always on track. “Siya and I both grew up in financially-strapped homes and we never wanted finances to be an issue. I do believe that finances can be a breaking point for a lot of relationships and it’s scary to me that money can have such a toll on people. I think, often, it’s just a lack of knowledge, which really comes back to the fact that if you do have financial knowledge, it’s important to share it and pass it on to your kids. There’s a lot on the line for us and Siya’s career is short as well. So, that’s also something we take into consideration on a yearly basis.” Practical ways to teach children finance lessons Kolisi takes the children grocery shopping and they compare the prices and look for the cheapest brands and deals. “We compare the weight of the products and the value we’ll get from buying them. The kids help me a lot with the groceries, and I try and let them be independent with the choices they make. I like to focus on things they eat daily, so they understand the value of the money that’s spent on these products. She says the Sanlam Savings Jar app has been a great way to start conversations and build excitement around saving. “As soon as we downloaded the app, Nic pulled out every money box he’s ever had, and we were counting all the 10c and 5c to put towards his goal. We managed to grow his dragon to adult size for his remote-control car (the more coins saved, the bigger the dragon grows). “Then we also set a goal to help someone else, which I think brings another important conversation up about how you can have goals for yourself, but how are you thinking about others? So many important conversations came from the app; I think the fact that it brings about a discussion between a child and parent is the most important thing.” Work to earn Kolisi says, “We have the non-negotiable daily chores like doing dishes, making the bed, etc. Then we have what we call the ‘extras’. The older kids know that when they want money to go out or whatever, they’ll tell us how much they need and then we give them the list of extra chores to earn the money. Nic has done a good car clean! We have a running list of things like picking up the dog poop, sorting the Tupperware in the cupboards, cleaning the bathrooms… “I believe the reason I work as hard as I do is because it’s stuck in my mind you cannot earn money without working. And I think the sooner a child understands that the better. Anything can change at any moment, but you can always manage because financial knowledge can never be taken away.” Realness and reward It’s also important to make money talk fun. “It can be super daunting, especially for teenagers, when you start talking about how much their education is going to cost. Then if they get a job, how much rent will cost, plus petrol, food, and all of these things. So, I think it’s important to use things like the Sanlam Savings Jar app to open up these difficult conversations in a fun way.” Lastly, it’s important that the conversations are continuous. “Kezzie doesn’t really care about goals yet. Nic is just starting to. Then you have my teenagers who want to go to parties and buy their friends gifts. Then it’s about going into adulthood and starting university and first jobs. Each phase of life needs

September 10, 2021

Three financial tips to ride the third wave

South Africans are officially in the third wave of the Covid-19 pandemic, and it has become abundantly clear that there are neither easy fixes to the virus, nor to the financial fallout experienced by many individuals, households and businesses. JustMoney, a trusted online source of information and advice on money matters, has revealed initial findings of a survey it’s conducting on responses to the vaccination roll-out.  The first 300 respondents have listed physical, emotional and financial wellbeing as areas where they have been most impacted. Although 63.7% of respondents believe that the successful roll-out of the vaccine will help them stabilise their financial circumstances, 32.6% said the vaccination would make no difference at all to their earning potential. JustMoney’s marketing manager, Shafeeka Anthony, says, “This is worrying, and although the vaccination rollout will improve matters, we need to brace ourselves for another difficult year at least. We need to protect our health as much as possible, and also our financial well-being. Taking steps now and planning for the future sounds daunting, but these will pay off later.” As a starting point, Anthony advises budgeting, tackling debt, and saving. 1 – Work out a budget: Track the amount of money coming in, list your regular monthly bills, then all your variable expenses – those that change from month to month. Bank and credit card statements are a helpful place to start. Soon you will see where your money goes, where you have money left over, and where you can cut back. Check whether you can freeze payments on services you are not currently using.  To help you budget, access JustMoney’s handy budget calculator here.  If a spreadsheet sounds too formal, read up about three alternatives to traditional budgeting here.  2 – Reduce your debt: Firstly, understand the difference between good and bad debt. Debt is acceptable if, for example, it takes the form of a home loan and allows you to buy a flat or house for your family. Debt is bad if it does not increase your wealth in the long term, for example spending money on the latest gadgets and fashions. If more than a third of your income is allocated to paying your debt, and you find yourself taking out loans to get through the month, you may well need debt assistance. Anthony urges all who are over-indebted to ask for help before a legal process is instituted. Find a handy JustMoney guide to debt counselling here. 3 – Save: If you have found yourself saving money due to the lockdown lack of social spending opportunity, be warned that there will be greater temptation to splurge as more people are vaccinated and matters return to a form of normality. Entrench your new, positive habits now, such as setting up a debit order to an investment account. “The pandemic has helped us to focus on what really matters, like our relationships, families and friends. Cut out what you don’t really need, get into good financial habits, and continue with these so that they are second nature even when this crisis is over. Addressing budgeting, debt and saving now can have a positive impact for decades to come.”

August 9, 2021

Turn your kids into bargain hunters not impulse buyers

According to a study by Invesp, 84% of shoppers admitted to making impulse purchases when shopping – with 8 out of 10 impulse buys being made in store as opposed to online. The likelihood of making an impulse buy is sure to increase when shopping with your children, as they spot items they are interested in throughout the store. Is giving in to these requests teaching your children negative spending and saving habits?  African retail giant, Game’s 2021 price perception survey found that over 80% of shoppers were prioritising bargain hunting more so now than they did a year ago – largely due to the economic impact of the COVID-19 pandemic. “We have seen a massive shift in the shopping and spending behaviours of our customers. There is an increased appetite for specials and deals across all our categories – especially essentials like groceries,” explains Katherine Madley, Vice President of Marketing at Game.  With the consumer budget under more strain than ever before, responsible spending saving habits are increasingly important. Curbing impulse buying habits is an easy and effective way to ensure you are sticking to your monthly budget and spending within your means. As a responsible retailer, Game has looked into ways that parents can instil a culture of healthy habits for their children in this regard – whether shopping in-store or online.   Give Kids Responsibility   Allow children to take responsibility when going shopping, whether it is to ensure you are getting all the items on the list or making sure you do not exceed your shopping budget for the day. This will give them practical experience in managing a budget, and ensure they are focused on planned purchases rather than impulse purchases.   Do Your Research   Teaching your children to shop around for the best deal, rather than buying on impulse, is an incredibly important lesson for them to learn. Game’s survey found that while 64% of consumers compare prices online when bargain hunting, a larger percentage (55%) are using printed leaflets than those carrying out Google searches.   The survey also showed that price comparison programmes are important, with 75% of respondents saying they see the value in comparing prices to receive 10% back on the difference, with Game’s Price Beat Promise, for example.   Define Wants and Needs   When children spot items they want in store, it may be an opportune time to talk to them about the difference between wants and needs. Establishing how much they’d need to save for their wants can make it a rewarding experience when they are able to make the purchase.   Game’s survey showed the importance of essential items in today’s economy, with consumers looking to save predominantly on groceries, baby products and furniture, where household income was less than R2000.  Interestingly, groceries remained a key driver for those with household incomes between R10 000 and R20 000.     Save Your Savings   Only 25% of shoppers are putting retail-related savings into a savings account, while the majority are spending these on extra items they need for their homes – no matter their monthly household income.  Encouraging your children to save these amounts, no matter how small, can build healthy saving habits and help them to reach their financial goals rather than giving into impulse purchasing for immediate gratification.   Establish Ground Rules  Establishing ground rules upfront with your children before going shopping can curb impulse buying by setting clear boundaries. Game is assisting its customers to teach children and teenagers the pitfalls of impulse buying, and has created a downloadable Shopping Agreement that children and their parents can sign that looks to promote responsible shopping and spending habits. Game has also partnered with Nicolette Mashile, author of Coco the Money Bunny – a children’s book that looks to teach children about money – as part of its Simply Save campaign.    “An important part of teaching children about money and the best ways to make it work for them, is teaching them about how best to spend and save their money,” says Mashile. “This agreement is aimed at setting clear boundaries and expectations around shopping trips and ensuring that parents and their children are clear on the rules around spending and saving. This is a way to teach these lessons through positive reinforcement.”  “In light of Savings Month, and as a responsible retailer, Game is focused on assisting our customers in ensuring they are shopping smart, spending responsibly and saving as much as they can,” concludes Madley.  

August 6, 2021

FIVE WAYS SAVING IS AS SIMPLE AS… FINDING A DRAGON

When children are young, a few things are generally true. Firstly, a fantastical story is far more likely to grab their attention than a hum-drum one. Secondly, their little minds are like sponges and they are rapidly learning money habits that are likely to last. So, it is the best time to start them on the right financial journey and set them up for a lifetime of financial confidence! This National Savings Month, when the spotlight is on learning how to put money away – for rainy and sunny days – now’s the time to have crucial, meaningful conversations with kids about good money habits. Sadly, not enough South African households have these discussions. To avoid that glazed-over look on your six-year-old’s face – her mind is 100% on ponies again – making money discussions fun is key. Sanlam recently launched its free Sanlam Savings Jar app which uses Augmented Reality and animation – in the form of a life-size growing dragon – to teach children the wonders of saving. Mariska Oosthuizen, Head of Brand at Sanlam, says that the app was designed to get families talking about money. “We recently rebooted our brand to be purpose-led, with a mission to empower more people to live with confidence. We believe this starts in childhood. With this app, we wanted to create something fun, that entrenches positive saving behaviour through repetition and reward.  Children become young dragon masters and the more treasure they save in their virtual jars, the more their pet dragons grow.” To help you explain simple money concepts in ways that will keep your children engaged, why not take them on a magical money quest? In keeping with the mystical and magical dragon theme, here are the five things that savings and setting out to find a dragon have in common. 1.To start your quest, you need a goal! Every adventure starts with a goal! This could be anything, from finding a dragon (because of course they exist) to building a magical castle out of jellybeans. When it comes to saving, you also need a goal, which should be simple and achievable!  Perhaps it is to save enough to buy a skateboard. Or enough to buy gifts for less privileged kids at Christmas. Or the family a round of ice creams next time you go out. Whatever you decide, this goal is very important. It gives you the focus and direction when it comes to saving. 2.Next you need to plan your quest… How exactly are you going to find this dragon? Do you have an ancient map, drawn up by the dragon riders of old? How long do you think your quest will take? What equipment do you need to wrangle your mystical beast when you find it?  Will you need some help from others on your adventure? A dragon tamer perhaps? These are very important considerations indeed. And saving for your goal is no different. You need a plan that says how long you are going to take to reach your goal and what exactly you’ll do with the treasure you earn on the way. A goal without a plan is just a dream! Make yours a reality. 3.How will you pay for your adventure? Dragon-wrangling costs quite a bit of treasure! Do you have enough saved, or will you need to use your talents to make more money? Think about the things you’ll need for your quest. They all come at a price! Once you find your winged wonder, it’ll also be pretty pricey to feed your new pet. Dragons eat A LOT of spaghetti. Similarly, when saving, you need a budget that will allow you to cover your needs and wants and still put enough aside to reach your savings goal. 4. What talents can you use to make more money for your quest? By now, you’ve probably realised that having a pet dragon is pricey. You need to feed your beastie, get his wings regularly serviced at the dragon-wash, and employ a talon-ted nail artist to file his claws. That’s not cheap! So, how will you earn more to grow your treasure? Think about what you can do around your castle to earn more money. Can you do extra chores for cash? Or do you have a special talent you can use? Could you paint your dragon and sell your art for money? Or bake cupcakes and sell them to family and friends? Make a list of ways you can get your paws on more shiny coins! 5.  Big adventures take time… but they’re so worth it! One does not simply find a dragon overnight. It takes time. A long time, sometimes. Dragons are pretty sneaky. They know how to hide. So, you might be looking for a while. But that means that when you find your precious pet, it’ll be all the more special, right? You might be tempted to settle for lesser dragons on the way. Like maybe you’ll see a lizard and think it’s just a baby dragon in disguise. But it’s not really! It will be fun for a while but deep down, you’ll still long to find yourself a bona fide dragon pet. One cannot fly into the clouds on a lizard. That would be ridiculous. When it comes to savings, the same can be said of spending on something that you don’t really need, just because you feel like getting something new. Think quickly before buying a small Lego pack with some figurine, rather than saving and waiting until you can get the bigger box set. A lot of adults struggle with delayed gratification and it can land them in all sorts of debt. Learning this skill during childhood can be invaluable for a successful and financially confident future. For more information about the Sanlam Savings Jar, visit Sanlam.co.za or download it from the app store. Or to complete a 21-day savings challenge with your kids, visit Sanlam.co.za And for more about the app, visit https://www.youtube.com/watch?v=f9lNrMnTTws 

August 5, 2021

SANLAM’S FIRST-OF-ITS-KIND APP USES GAMIFICATION TO MAKE SAVING MAGICAL FOR KIDS

This National Savings Month, Sanlam has launched its Sanlam Savings Jar  – an interactive app that introduces children to the wonder of saving. The free, first-of-its-kind app helps little ones start a journey of financial confidence by setting them on the path to savvy savings habits for life.  Children become young dragon masters embarking on a fantastical quest. The more they save, the more their mystical dragon grows. Gamification is used to incentivise goal setting and bring the topic of saving to life. The app – which is available on iOS and Android – is an informational tool for parents seeking to introduce their children to smart money behaviours. It forms part of Sanlam’s longstanding purpose to target financial literacy to empower more people to live with confidence, go after their goals and believe they can create a better life for themselves. This doesn’t happen overnight. It’s a journey, which starts in childhood. Therefore Sanlam has consistently fostered foundational financial and numeracy skills in young people, through various initiatives, including a 21-year relationship with Takalani Sesame. Mariska Oosthuizen, Head of Brand at Sanlam, says, “We know that gamification is a powerful means to educate young people. The Sanlam Savings Jar breaks down basic financial concepts, like planning, goal setting, needs versus wants, and appreciation of money and how to earn it. It’s critical to teach children these concepts early on as habits are formed from as young as seven. Research has shown that South Africa has a notoriously poor savings culture. We hope this app gets the whole family talking about money – a topic that’s often taboo. Our goal is for it to improve families’ financial confidence and success. This has been an underlying theme in all our previous Savings Month campaigns, from ‘Conspicuous Savers’ to the famed ‘One Rand Man’. We consistently use the currency of creativity to attempt to reach people in meaningful, innovative ways. It’s important to note the Sanlam Savings Jar teaches children savings habits through virtual ‘treasure’, rather than actually asking people to save in the current, difficult Covid-19 climate.” Gamification means better learning outcomes Gamification has long been seen as a silver bullet of sorts when it comes to educational outcomes. Multiple studies point to improved engagement and learning. The Smithsonian Science Education Centre says gamification stimulates more activity in the regions of the brain that facilitate cognitive development. So-called ‘brain games’ improve the brain’s processing and information retention. Crucially, children learn morebecause they want to stick with the learning task for longer. Marilize Botha, occupational therapist, says that gamification works well because the focus shifts from expectations to fun, “That’s when we learn and retain information much more easily. For example, when children play games like hopscotch, they’re learning maths without being aware of it.” She says apps work when they have a competitive component, “For example, a child has to apply the learned skill to reach their goal. That’s when the repetition aspect lays down and consolidates the skill.” In Sanlam Savings Jar, saving is the skill reinforced through rewarded repetition. This instant feedback loop is another key part to gamification’s success. With the Sanlam Savings Jar, the closer children get to their goal, the more powerful their dragon grows. The behaviour merits a tangible reward. Pavlovian and powerful, this kind of conditioning helps habits to form. The Sanlam Savings Jar app also allows little ones to learn anywhere, in their own time and on their terms. And it is accessible. The proliferation of mobile means young people are familiar with smart phones almost from the get-go. So, it makes sense to reach them with fresh learning opportunities through a medium they’re active on. Botha adds that play is pivotal to learning, “It’s the main functional task every child must engage in to acquire new skills. In the ‘space’ of playing, children experience the freedom to try – and sometimes also fail – to gain a new skill in a stress-free environment.”  Apps can provide powerful platforms for play. Botha advises that when choosing an educational app, parents ask whether it will help a child to learn a contributing life skill and if the child will experience gratification through the learning process. The Sanlam Savings Jar was designed to make learning as fun and effortless as possible. Oosthuizen concludes, “In 2021, we rebooted our business and brand to become a purpose-driven organisation focused on giving millions of Africans the chance to live with financial confidence. The Sanlam Savings Jar is one of several initiatives that is strongly driving this purpose. It builds on our long journey in the lives of South African children, led by a 21-year partnership with Takalani Sesame and our Foundation’s work in schools and communities. To date, we’ve invested R209 million in Takalani Sesame alone.” For more information, visit the Sanlam Savings Jar site.

August 2, 2021

Avoid financial fraud when getting your vax

People are feeling more positive about dealing with the pandemic now that more healthcare workers and senior citizens are being vaccinated – but financial caution is still the name of the game, warns personal finance website JustMoney.co.za. “Keep tabs on your personal information when getting your jabs,” says JustMoney.co.za marketing manager Shafeeka Anthony. “Sadly, even a pandemic does not stop fraudsters in their tracks. The vaccination programme has the potential to increase economic activity and restore some business confidence, but it also offers new opportunities for charlatans and tricksters.” People may also be tempted to spend cash more freely when they are vaccinated, return to office work, and participate again in social and sporting activities. However, even if the vaccine rollout picks up speed, it’s vital to remain vigilant when it comes to managing your money. “The pandemic is by no means over, and we were already in a recession before Covid hit,” says Anthony. “South Africa has the highest unemployment rate in over a decade. Many people who enjoyed permanent jobs have had to adapt to contract or freelance work. Even those who were on track to pay off their debt have experienced setbacks. The situation is dire for many, and likely to remain so for some time.” Vaccination scams News that the vaccines are being rolled out has made many people impatient to get their jab. It’s important, however, not to allow your anxiety or eagerness make you vulnerable to Covid-related scams. For example, you could fraudulently be asked for a payment in order to get a place in a queue or to obtain a vaccination. Scammers also use telemarketing calls, text messages, social media platforms and door-to-door visits to pick up personal information. This can lead to medical identity theft, when someone who has no right to claim on your medical aid uses your information to gain access to healthcare services. This usually involves out-of-hospital claims, such as filling a prescription at a pharmacy or visiting a general practitioner and accessing medical services in your name. Read an article on medical identity theft here. People are also vulnerable when they search online for better prices for specialist medication. You could end up buying a fake drug, not only losing your money, but potentially damaging your health too.  “Should you require accurate information pertaining to Covid, vaccinations and other medical questions, check out the official Covid government site, contact your medical aid provider, or get in touch with a health professional. Do not share your personal or health information with a stranger,” says Anthony. If the pandemic has made you more aware of medical costs, read a handy JustMoney.co.za guide to medical aid here.  Ailing investments People with some spare cash could also be tempted to invest in companies that produce medical devices or drugs. The healthcare sector has caught investors’ attention as some companies have received regulatory approval for drugs to treat Covid, while others are rushing to develop products and get approval. Unscrupulous operators are well aware of this. “If an investment sounds too good to be true, it probably is,” warns Anthony. “Before you invest in a potentially dodgy company, do your homework. Preferably discuss your personal circumstances and goals with a qualified financial advisor. The key to reducing investment risk is to have a balanced, diversified portfolio and to plan for the long term.” Read a handy JustMoney.co.za article on who can benefit from the services of a financial advisor, and how you will be billed for this here. Unhealthy debt A key tip to remaining financially healthy is to avoid getting into debt, and if you already have one or more loans, do your best to keep up your repayments. The general rule is that 20%-30% of your salary should go towards repaying your large debts such as a house or car. “Create a budget, stay in touch with your creditors, and if you experience problems with repayments, discuss your situation. People will be more understanding if they see you have a plan.” Read a JustMoney.co.za article on how to keep your debt under control here. If you are having problems with debt, find out more about debt counselling and consolidation here. “Taking the time to learn a few critical financial rules can help you build a healthy financial future,” says Anthony. “At JustMoney.co.za, we understand that juggling all the demands of a pandemic is stressful enough without worrying about how to manage your money matters. “That’s why we’ve made it straightforward to find trustworthy articles, guides, budget calculators and products on our website and our credit management portal, CreditSav. You can quickly get the information you need on your desktop or mobile phone and make informed decisions,” Anthony concludes. Find advice you can bank on at https://www.justmoney.co.za/.

July 28, 2021

What kind of insurance should you be considering for older children?

Every parent wants to protect their children to the best of their ability. While the need for long-term insurance for an adult with a career, assets and responsibilities is well understood, few parents consider the value of taking out insurance for older children, particularly those in their late teens and early twenties, to protect them against unforeseen incidents. This age group may not yet be wealthy in terms of assets, but they are ‘rich’ when you consider all their future pay cheques. However, there is a reason that car insurance premiums for young adults under 25 are higher than they are for somebody older – this is a high risk group. But what kind of cover should you be considering for your older children?  Permanent disability or incapacity The most important insurance you should be considering is a permanent disability or incapacity benefit.  In the unlikely event that your child becomes permanently incapacitated, parents and family members are required to assume financial responsibility for providing for the child for the rest of their lives. Expenses could include once-off costs such as modifying your home to accommodate a disabled person, specialised equipment, as well as ongoing monthly expenses for food, clothing, care giving and medical treatment. Life cover Unless your child has financial dependents or significant debt in the form of a student or car loan there is no real need for life cover. However, the advantage to taking out life cover for a young child is that life cover is a whole of life benefit. By taking it out when your child is young and healthy they are guaranteed that there will be cover even if there is a deterioration in their health. Severe illness Statistically speaking there is a lower chance of a child suffering from a severe illness, but that said, there are no guarantees. Each year we see cancer and heart attacks dominate the claims paid out for this benefit although in fairness, this is primarily to older claimants. However, while cancer might be more prevalent in older age categories, the youth are not excluded. Medical aids typically don’t cover the main costs associated with a dread disease such as the cost of a care giver, travel expenses to a rehabilitation centre, and adapting a home for somebody with special needs which means that it is a good idea to have some cover in place to protect against your child suffering from a severe illness. The best case scenario is that your child never claims on this benefit and can chose to continue with the cover when they become an adult. This is a need that remains no matter the life stage one finds themselves and will be needed for one’s whole life. How to insure a child Most insurers offer a “child care benefit’ linked to the insurance benefit taken out by the parent. There will be a maximum pay out in the event of claim. However, the child would need to suffer a very serious illness or injury in order to qualify for a claim. Some insurers allow children from 15 to be comprehensively insured. The disability benefit is only measured against ‘impairment’ definitions as there are no occupational duties to claim against.  It’s time to shake off the perception that only the breadwinner needs disability and illness cover given that the well-being and health of every family member has an impact on household expenses. Speak to your financial advisor for the most appropriate cover for your child. By Trevor Crouse, Private Wealth Manager at NFB Private Wealth Management

July 17, 2021

Teaching children how to spend

You don’t have to wait to leave a monetary legacy for your children, instead, help them develop healthy savings and spending habits now that will set them up for future financial freedom.  As parents we have a significant role to play teaching our children the value of money. These lessons should not be limited to lessons around saving money but should be extended to how to spend. I was shopping with my children a few months ago when my son asked me to buy an expensive Lego set. “Put it on your card,” was his solution when his Lego request was denied. You still have to pay for whatever you spend on your credit card, I explained, adding that you have to earn enough to cover your spend. Since ‘spend less than you earn, buy less than you can afford’ is my personal mantra, I only spend on my card what I can afford to ‘repay’ at the end of each month. Having decided that my children would benefit from a money chat at this point in their lives, I adapted a story from a children’s book, ‘More Than Enough’, distributed by Foord Asset Management. Here’s what I told them: When squirrels get old, they don’t have as much energy as they did when they were young, and they like to rest and enjoy the forest a little more. However, when squirrels are young, they are full of energy and need to collect as many acorns as they can, for a few different reasons: They collect acorns so that they and their family can eat.  They collect acorns for the winter in case food is more difficult to find during these months. They also collect acorns for when they are old and don’t have the energy, or the ability, to go out and look for acorns. These three reasons easily translate into our daily lives and are the motivation both to earn and save: Earn so you can buy food and clothes, pay rent or a bond, pay school fees and maybe even go on holiday.  Create an emergency pot of money in case things do not go to plan – making provision for, for example, unanticipated expenses, job loss, health issues, and so on. You can also add long-term insurance to this pile of acorns; this is a crucial part of an investment portfolio to provide for you and your family in the event of death or disability. Save money for retirement.  Out-of-pocket principles Arguably as important as why to save, it’s imperative to teach children how tospend their earnings and savings. I have often heard friends proudly noting that their children save all their pocket money.  That means that they continue to spend their parents’ money … thereby losing a valuable opportunity to learn a lesson on the value of money. Following our squirrel tale, my children started to receive their own pocket money and manage their own credit cards (debit cards for now, but they don’t yet know the difference). I advised them that half the pocket money was going into a ‘spending account’, for whatever purchases they wanted, and the other half into a ‘savings account’, not to be touched until they turn 18. For now, I put R50 per month into each spending and savings account, and separately have a unit trust for each of them that they are unlikely to be aware of until adulthood. What’s important is not the amount, but the principle. There is already seen evidence of the spending lesson taking root. Over the past few months, my children’s spending habits have changed. What started off as spending on rubbish and sweets has transformed into waiting for a few months of pocket money to get something they really want.  They occasionally ask me how much their savings account has accumulated so they can weigh up a purchase. Each child has had a birthday since we started this and any cash gifts from family and friends go into the spending account. Their savings accounts earn interest, albeit at a paltry rate, which is an opportunity to teach them about the free money (interest and compound interest) they earn by leaving the savings pot alone. Now is the time  We have a duty to teach our children about money and, more importantly, the value of money. This does not mean your sole purpose needs to be to find a job that pays the most. What it does mean is understanding where you are and where you want to go. Financial security, I believe, is within most people’s reach although this will mean different things to different people. If you earn R30 000 a month, for example, it’s unlikely you will drive a Ferrari and go on annual overseas holidays, but you can probably put something away to secure your future.  It’s never too late to start learning about money and savings – it’s also never too early. By Stephen Katzenellenbogen, Senior Executive and Wealth Manager at NFB Wealth Management

July 15, 2021

I work from home: can I claim tax benefits?

The Covid-19 pandemic has brought with it a shift towards long term workplace flexibility no one could have predicted. Some parents see it as a blessing, others find it distracting and long for the ‘good old days’ of canteen coffee and conference room catch-ups. Whatever your views, if you are an employee who finds themselves with a newfound level of workplace flexibility, there is a benefit you might not have thought about. Did you know SARS offers tax benefits for work from home and remote working employees? And if you read the word ‘tax’ and your mind went to a dark place filled with thoughts of deductibles and deadlines then fear not, we’ve broken it down into four easy steps for you.  Do I qualify for tax benefits? If you are a freelancer or independent contractor working from home in South Africa, then yes, you absolutely do qualify for various income tax benefits. In addition, people who are employed on a fixed term contract or as a permanent employee, who work from home for all or part of the year can claim expenses from their income tax but the requirements are a little more stringent. This includes employees who work partly in office and partly at home in a more hybrid working manner, and would require that you keep a log of the amount of time spent in the office versus at home in order to see if you qualify for the work-from-home tax savings.  What kind of costs can be deducted from income tax? If you own your own business (even as a sole proprietor), you can track any costs related to operating your own business from home as it can reduce your annual income tax bill. If you are employed and work from home, track any costs you need in order to do your job, such as telephone bills, internet costs, office equipment, stationery, cleaning, rent, bond interest, repair costs to your office premises and other expenses in connection to the wear and tear of your operating equipment and working space. Bear in mind the working space needs to be specifically dedicated for the purpose of work, e.g. a home study set up as an office, it cannot be your kitchen counter or a communal space in the home. How do I claim income tax back from SARS? Start by retaining all invoices and slips for expenses incurred. This way you can substantiate that the expenses claimed relate directly to working from home.  For hybrid office and home workers, it’s best to keep a running spreadsheet of days worked from home, and days at the office. Then collate your statements and relevant documentation to the days worked at home so you have a complete record of all your work from home activities for tax purposes. Are permanent and fixed term contracting staff liable for tax deductions? With Covid-19 making it fairly mainstream to work from home, it is welcome news that all employees are liable for tax deductions for home office expenditure, provided they have worked from home for at least six months of the tax year. This is in line with the ‘Section 11(a) as part of the South African Income Tax Act (58 of 1962).’  As remote working becomes more and more the norm, it’s important to keep track of the Income Tax Act as it is sure to evolve and reflect the ever expanding population of remote workers. 

July 5, 2021
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