2020 has flown by and, believe it or not, December is right around the corner. WageWise is here to help you spend smart this holiday season and make sure that you stay on track financially.
This year has taken its toll on many of us BUT WageWise is still right here to help us get back on our feet and properly manage our money. We’ve put together a 7-item financial checklist for you – see which ones you can tick off the list and which ones you still need to work on.
6 tips to avoid COVID-19 debt traps
Since the national state of disaster was declared on 15 March, the COVID-19 pandemic has been with us for longer than many of us expected. There have been serious financial consequences as the global economy has buckled under the fall out of the pandemic. Now, more than ever, is the time to review your finances and make an effort to avoid any debt traps – don’t worry,WageWise is here to help you.
“A debt trap is a situation in which a debt is difficult or impossible to repay, often because of high interest rates.”
It’s been a difficult few months with COVID-19 and we have all been affected in some way or another – be it physically, financially, or mentally. WageWise is here to help you recover (financially) from COVID-19 and get back on track. The first step is to re-adjust your budget.
Celebrate Heritage Month with us this September as we talk about the topic of leaving a legacy. That is, the things we leave behind for our friends, family, and loved ones. Leaving behind a healthy financial legacy is only possible when you start building a strong financial foundation – you can only help others financially if you are financially strong yourself.
Try out these 5 tips from WageWise to better manage your money and leave behind a healthy financial legacy:
- Plan ahead
If you fail to plan, you plan to fail. There are many ways to spend your money but with planning you can spend your money wisely to make sure you:
- Cover all your basic needs (like rent);
- Save for emergencies (such as an unexpected healthcare expense);
- Save towards your goals (for example a deposit on a home); and
- Save for retirement (so you can be financially independent).
A financial plan is called a budget and should include all your income (the money you receive) as well as your expenses (the things you spend money on). Watch our video on planning with money and budgeting.
- Get life insurance
The main purpose of life insurance is to give your loved ones some financial protection when you pass away. Life insurance can be a huge help when you pass away as it can help with things such as:
- Paying for “final expenses” which usually means your medical and funeral costs
- Covering family debt
- Maintaining your family’s lifestyle
- Supporting a child’s education
- Save for retirement
Saving for retirement is one of the most important things to think about when planning your financial future. Retirement savings are long-term savings options that give you an income when you retire and can also serve as an income for loved ones if you pass away. Because retirement is a long-term financial goal, you can save and invest your money and watch it grow over a longer period. As time goes on, you start to earn interest on interest which help you to build your wealth.
Want to see the importance of saving for retirement? Watch our video.
- Create good financial habits
Leaving behind a financial legacy doesn’t have to only be about physical items and money. Take some time to instil your good money habits on your friends, family, and loved ones. This education can help them understand the value behind money and how to make the most of it themselves. When it comes to children, it’s always a good idea to teach them from a young age as this knowledge will carry with them throughout their lives and help them better manage money. Just remember to keep it simple.
- Set up a will
A will is a legal document which allows you to distribute your assets afters death, appoint guardians for minor children and specify your funeral wishes. Having a will is really important as it means you, rather than someone else, get to decide what happens to your things when you pass away. A will is also important as it lets you leave things to friends, family, and loved ones that can make their life easier and reduces some of the stress placed on them.
Read our quick article here to learn more about drafting a will.
September is Heritage Month and so it seemed appropriate that our WageWise theme be all about your legacy. This means the money, property and assets that you are leaving behind for your family and for future generations. To do this, you need a will.
“A will is a legal document which allows you to both distribute your assets after death and appoint guardians for minor children.”
Although not an easy topic, having a will is really important. It means that you, rather than someone else, gets to decide what happens to your things when you pass away. This means that you can choose how to distribute your possessions (such as property, vehicles, money, and jewellery) among your family, partners, friends and even charities. A will can also allow you to specify your funeral wishes and, in general, can reduce some of the stress placed on your loved ones.
TOP TIP: Keep your will up-to-date so that when you pass away, the right people get your belongings. This is especially important when circumstances change, such as when getting married or the birth of a child.
If you pass away without a will, then the Government appoints an Executor to administer your assets and they decide who gets what. The problem with this is that your things may not go to the right people and it can create some sadness and anger for those you leave behind.
So, what do you need to know about drafting a will?
Here’s a quick 9-item checklist to help you:
✅ Information to easily identify yourself
✅ Complete and accurate list of your assets
✅ Decide who gets what and list the full names and relationships of your beneficiaries
✅ Choose an executor who will be your personal representative
✅ If you have children who are minors, choose a guardian for them
✅ If you have any specific requests for your funeral
✅ Sign and date your will in front of witnesses
✅ Have two people witness the will who are not beneficiaries
✅ Store your will safely
Who can help me with my will?
While it is possible to find self-help articles to draw up a will on your own, it is better to go through a professional agency as it is a legal document and you don’t want there to be any issues.
These agencies include:
- Any commercial bank
- A legal attorney
- A chartered accountant
- Various will and testament specialists
TOP TIP: Whichever option you choose, it is important to be aware that there may be costs involved in the process.
Once you have drawn up your will you can register it, free of charge, at the South African Registry of Wills and Testaments for safekeeping or you can store it in a safe place which is known to a few close friends or family members.
From managing households to managing businesses, we want to celebrate the powerful role of women in our country this Women’s Month.
We know that compared to men, on average, women earn less over their lifetime, spend more time out of work taking care of family, and also live longer so require more money in later years.
The good news is that the gender gap is getting smaller. There have never been more female CEOs, female-led households, and female entrepreneurs than there are today – and this number is continuing to increase.
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.
- Short-term insurance
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.
- Long-term insurance
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.
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.
Watch our savings video:
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 email@example.com 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.