Many people strive to be healthy. Health refers to more than only having a healthy body. Optimum health includes a healthy body; a healthy mind and healthy finances. There is a direct and indirect relationship between a healthy body and financial wellbeing. Financial difficulty can result in increased stress levels; lack of sleep; reduced energy levels; eating disorders; and alcohol abuse to name a few, which could in turn impact on physical health. A lack of financial resources can also have a direct impact on being able to afford proper health care. The other side of the coin is also true – poor health or illness can ruin your financial wealth.
You often need a tonic to boost your physical health. You also need a tonic to boost your financial health. The following points will definitely act as a tonic to healthier finances:
Monitor your expenses by using a budget
Refrain from over-spending. Compile a budget and keep to it. Divide your budget into the following categories: income; savings (i.e. investments, saving for a holiday, etc.); “cannot live without expenses” (i.e. groceries, water and electricity, medical aid, etc.); “nice to have expenses” (i.e. hairdresser, DSTV, entertainment, etc.) and emergency expenses (i.e. medical expenses which are not covered by the medical aid, etc.).
Make saving a priority
South Africa is one of the countries with the poorest saving habits. Saving should be a priority; not something that happen on an ad-hoc basis. Save at least 10% of your monthly income after deducting tax, pension fund contributions and medical aid contributions. If you do not have any debt to repay, increase your savings to at least 30% of your monthly income.
Avoid debt at all cost
Debt is easily available which explains why more than 11 million of South Africans are over-indebted. Stay debt free as far as possible. If you cannot buy it cash, do not buy it. Whenever you have additional cash, use it to repay your debt.
An emergency fund is a necessity
Build up an emergency fund that you can use for unforeseen big expenses. Having funds available to use during an emergency gives you peace of mind especially in a medical emergency. Use the funds for real emergencies and don’t be tempted to use the money for an overseas trip or the latest fashion trends.
Take care of your health
Good medical care is expensive. Don’t underestimate the importance of having proper medical aid cover in place. It doesn’t matter how healthy, fit or strong you believe you are, it can change in a split second. If you fall ill, you want the best medical care possible. You might get away with only having a hospital plan, provided you have an emergency fund in place to cover unforeseen medical expenses.
Protect yourself and your loved ones
Hopefully you will never need it, but rather be safe than sorry. The amount of your life cover depends largely on your dependents and your level of debt. Disability cover and dread disease cover become critically important in the event of an accident or you do fall ill.
Retirement planning is crucial
Less than 6% of South Africans will be able to retire comfortably without having to drastically change their lifestyle. The younger you start planning and saving for your retirement the better. Review your retirement savings on an annual basis and adjust your contributions accordingly. Remember you also receive a tax saving for retirement contributions.
Don’t leave chaos behind when you die
Ensure that you have a will and that you keep it up to date. It is especially important to update your will when big life events happen like getting married, having children or getting divorced. Unfortunately death is a reality for all of us and you don’t want to leave chaos to your loved ones when you die.
Become financially independent
Too many women are still dependent on their partners to financially provide for them and their families. High divorce rates, crime rates, men dying young due to critical illnesses and retrenchments are a few factors that can force a woman to become the breadwinner and having to provide for herself and the family. Set a goal to become financially independent and actively strive to achieve it. You will never regret this decision.
Equip yourself with financial knowledge
Financial literacy will enable you to make good financial decisions without having to rely on partners, financial planners or employers. Read books, attend seminars, do online courses or get yourself a financial coach. You are the only person who will always have your best interest at heart.
You are the architect of your future. You can continue to be stressed about your financial situation or you can actively do something to change it. You need to exercise, eat a healthy balanced diet and get sufficient sleep to improve your physical health. Similarly you need a financial plan, discipline and knowledge to improve your financial wellbeing. Don’t neglect to drink your tonic to boost your financial health.
Unedited version of the article published in SA Womens Health, August 2017
Written by Ronel Jooste
CA(SA) and Financial Coach
Contact Ronel: firstname.lastname@example.org
For more information about my financial wellness programmes visit my website: www.financiallyfitlife.co.za/financial-wellness