Here at WageWise, our aim is to help you better understand your finances and the options you have when it comes to managing your money. This month, we explore the topic of insurance and why you need it.
Insurance is an important way for you to protect your life for when things go wrong. We all face risks and emergencies in our lives – whether it’s linked to our health, our jobs, or our personal belongings like our home or car. Having insurance is a reliable way to manage these risks because it gives you peace of mind financially.
There are two types of insurance you can get, which are grouped based on time.
This insurance is usually taken for a specific or ‘short’ period of time and may be temporary based on your needs. This insurance usually covers possessions. For example, you may take out vehicle insurance in case you have a car accident, or household insurance in case something in your home gets damaged or stolen.
This insurance covers life-changing events to help provide you with an income in the longer term. This insurance usually covers people. For example, you may take out a funeral policy to cover the costs of the funeral if there is a death in the family, or a life policy to help provide for the policy holder’ remaining family members when he/she dies.
Both of these types of insurance are necessary, but during hard times like now with COVID-19, long-term insurance is even more important.
We know that there are a lot of South Africans experiencing financial difficulty during this pandemic and you may feel like the answer is to cut back on some of your insurance payments. It’s not.
The way insurance works is that you enter into a contract with an insurance company where you make regular payments (called ‘premiums’) to the insurer. If you make a claim, your insurer pays out for the loss that is covered under your policy. BUT this can be declined if the policy is not paid up – so even if you miss just one payment, you can risk not being compensated or paid out when you really need to be.
What if you can’t pay right now?
If you are having difficulty paying your insurance premiums, it’s important to know that you have options.
Contact your insurance provider or financial adviser who can help you – they may be able to restructure or lower your cover and reduce your monthly premium, don’t make any rushed decision or allow your premium debit orders to bounce without talking to your insurance provider.
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When people start talking about finances, things can get quite confusing and sometimes you might want to avoid the topic completely. But, that doesn’t have to be the case. Here at WageWise we help explain important money topics including proper planning and budgeting, understanding your payslip and bank statements, debt counselling, and retirement planning.
July is National Savings Month, so it’s a great time to #GetWageWise and learn more about savings which can help you be better prepared for the future and for any of life’s emergencies.
Saving is something we hear a lot about, but are we doing it? One of the most important parts of saving is that the sooner you start, the better. This is because one of the benefits of saving your money in a separate savings account or investment product is that your money earns interest. This means that it grows a little bit every year and helps you to build your wealth. The sooner you start, the more time you money has to grow.
We are all at different stages in our savings journey. Some of us might have already started saving, while others are only just getting started.
Here are 4 top tips to START saving:
Set a savings goal: Having a specific goal that you can work towards makes it easier to stay on track and to monitor your progress.
Save regularly: Consistency is key. Commit to putting money into your savings every single month. Ideally this should be done at the start of the month or as soon as you get paid your salary. Hint: Set up a stop or debit order for your savings so payments happen easily and automatically without you needing to do anything. This means you ask the bank or a financial service provider to deduct the money from your account each month on a set date.
Save what you can: Sometimes we think that to save we need to be putting away lots of money, but that isn’t the case. Every little bit helps so save whatever you can.
Save in a separate account: Always put your savings into a separate bank account. That way it is separate from your day-to-day money account and you can’t spent it easily. You will also earn better interest rates when your money is in a dedicated saving account or investment product.
If you’ve already started saving, great! It’s important that you maintain this and keep growing your wealth.
Here are 4 top tips to KEEP saving:
Review your savings goal: Over time your savings goals may change. If this is the case, you might need to adjust the amount of money you are saving each month.
Don’t withdraw your funds unless you have to: We may be tempted at the end of a tight month to take some money out of our savings account. Try avoid this. Remember that the money in your savings account is earning interest and growing your wealth.
Increase contributions when you can: If you are already putting money away each month, try increase the amount you put away. Maybe you have stuck to your budget properly this month and have extra money left over, or you have just received a bonus or a pay increase. The best way to spend this extra money is to put it into savings. Your future self will thank you.
Talk to a financial adviser: Some savings goals are difficult to calculate and the best way to work out how to make these goals happen is by seeing an experienced and certified financial adviser. Interested? Contact the Financial Sector Conduct Authority (FCSA) by email at firstname.lastname@example.org or call them on 0800 203 722. You can also visit their website.
Have you recently received your first salary? Are you itching to head to the shops and spend your hard earned money on a treat for yourself?
You might find that now that you are earning a salary you are being approached by various credit providers with appealing offers for store cards and credit cards. You might be tempted to take up these offers so you can spoil yourself to a new outfit or a new cellphone.
The Credit Bureau Association (CBA) has released a 5-part video series, that features three young people who are furthering their studies and want to apply for credit. Watch the series to see how the way that they spend and repay their loans affects their ability to obtain credit later when they start their working life. The Credit Bureau Association (CBA) is a voluntary industry body, representing 13 of the registered credit bureaus within South Africa.
If you have just started out in your first job, you probably aren’t thinking about retirement – that’s about 40 years away! But you probably already have plans for how you would like to retire. Maybe you want to travel the world or maybe you’d like to spend your free time socialising with friends and family in your own home?
Retirement might seem like a long way off but before you know it you’ll be nearing the end of your career and you’ll have to start thinking about how you will make your retirement dreams a reality. But for many millions of South Africans who didn’t plan for their retirement, they have to work out how to survive without an income.