Moving beyond one-size-fits-all financial planning

A new year means new beginnings, new possibilities, new opportunities, and new experiences. It also means fresh chances. Things may or may not have panned out the way we wanted last year, but reflecting on the year gone by and having a new outlook is key to a better future. If the last 2 years has taught the world anything, it’s the importance of financial security and the need to be prepared for life and its uncertainties. 

We Start 2022 Stronger (WSS) is a campaign aimed at equipping consumers, like you, with knowledge to manage money better, making us feel more in control despite what’s going in our lives. Being in a confident, knowledgeable headspace will help us worry less, empower us to think more clearly and make better choices, supported by others who understand the struggle and who also want to have a better 2022. 

Most people depend on guidance from friends and family when it comes to their own financial planning - what to do, how to do it and when to do it. This advice can be as diverse as our collective of family and friends which can lead to us feeling overwhelmed by contrary opinions, and different options that may not be aligned to our needs and our financial goals. Working towards financial stability is a process and it requires building good habits and the right information to help you work towards achieving your financial goals. 

Research indicates that it takes an average of 66 days for a behavior to become part of your lifestyle, in other words, a habit. So, if there is ever a good time to start working towards our personal financial goals and cultivating some financial discipline, it is now! Insurance like life cover, savings and investments can help us have a financially strong 2022. 

For most people, preparing for the unknown is the best place to start. In essence insurance is there to protect you from the unknown, but insurance can be confusing. It’s hard to know what you really need or want. As we grow older, get married, build families and maybe even start businesses, we come to realise more and more that life insurance is a fundamental part of having a sound financial plan.  Life cover is generally affordable contrary to what a lot of people believe and there really is no excuse for not having life cover. 

Over the years, you’ll find comfort in knowing money will be available to protect your loved ones should anything happen to you especially if your loved ones depend on you financially. In addition to providing income to cover everyday living expenses, your family needs insurance to cover outstanding debts and other expenses such funeral costs that can easily run into thousands of rands. You don’t want your loved ones to be left with any extra financial burden in addition to the emotional should you happen to pass away. We don’t know when we’ll pass away. It could be today, tomorrow or 50 years from now, but it will happen eventually. 

No amount of money can ever replace a person, But more than anything, life insurance can help provide protection for the uncertainties in life. Without a doubt, having life cover will bring you and your family peace of mind. It protects your loved ones from the unknown and helps them through otherwise difficult time of loss. 

We understand saving can be difficult. But saving even a little for a rainy day is essential as a solid savings base would give you a cushion to handle uncertainties in a better way. A plan for savings should begin at the budgeting stage itself. The recommended approach by most financial experts is the 50-30-20 rule.  According to this, we should allocate 50% of our income to essential expenses or needs (living, food and other expenses), 20% towards personal expenditure or wants (luxuries and leisure) and 20% towards savings or financial goals such as investments. It is important to know that there is no one-size-fits-all. You can arrive at your own rule of thumb after considering your income and financial goals. Set a target and work towards it and remember that a penny saved is a penny earned. 

Gone are the days when people used to only rely on their savings to secure their future. In today’s world we can’t only depend on savings to secure financial safety. Money kept in your savings account or in locker may not serve its purpose because just earning money and keeping it idle is not enough. Making your money work for you is the way to go. But how do you do that? By investing your money. Investments have the potential to help you meet your financial goals like purchasing a house or retiring comfortably. 

Investing instills a sense of financial discipline as you develop a habit of setting aside a particular amount every month towards your investments. Again, there is no one-size-fits all when it comes to investment plans. The investment choice depends on factors like age and financial goals. It is good to invest after conducting proper research and adequately understanding the available options. 

With all of these options to think about, it’s no surprise that finances cause many of us to feel anxious, we’d rather not think about it and hope somehow the situation will magically sort itself out, or we commit to fixing it later. That’s why it’s important to speak to a certified financial adviser every year, because they will help you determine when to insure, save or invest based on your own individual needs. 

Tune into the #WeStart2022Stronger web series on Metropolitan’s social media platforms to get more information on insurance, savings and investments so you have a stronger 2022.