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Financial health

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Understanding The Financial Stages Of Life

Money is an intricate part of all our lives. Fortunately, financial freedom provides you and your family with the liberty to live securely.

Despite this, most of us know very little when it comes to money. Many of us are not properly educated when it comes to handling finances. The majority of graduates go into the workforce not knowing the importance of setting financial goals.

As your life changes so should your money. Different life stages call for different aspirations and different ways to manage your finances. Here, we aim to equip you with basic knowledge on how to handle your finances according to your life stage.

Entering The Workforce – Get Started Early

Female graduate holding degree scroll

It is important to take steps towards better financial literacy while you are still in your early career years. Create a realistic budget and begin tracking your expenses monthly. If you have any debt make paying it off a priority.

Building a good credit history while you are in your 20s will make your life much easier in the future. A favourable financial standing will make it simpler to purchase big assets such as a car or a house five to 10 years from now.

It might seem premature but the sooner you start planning your retirement the better. This ensures that your standard of living stays the same in your later years.

How To Start Your Financial Journey

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Achieving a well-formulated estate plan in your early years can seem overwhelming. But, it doesn’t need to be.

It is important to recognise products that can help you gain long-term financial success. Here are a few things you should be doing with your money in the early stages of your career:

  1. Start saving – build your finances when you are still young.
  2. Avoid debt where possible.
  3. Don’t overspend – make a habit of living within your means.
  4. Start planning for retirement.
  5. Get disability insurance.

Partnering with a reliable financial service provider, like our team at Maysure Financial Services, can help you plan for your future. Find someone you trust to help you get started on your money journey.

 Planning Your Family Finances

Young family playing on floor

Settling down and having a family comes with greater financial responsibilities. More people depend on your income at this stage in life (spouse, children, among others). Protecting your income becomes more crucial than ever. 

While saving is always a necessary goal, the majority of your investments should go towards safeguarding your family. One particularly useful tool for this is life insurance. Life insurance can save your family the heartache of financial hardship in the event of an unexpected death.

Purchasing health insurance and disability cover is also a good step in this stage of life. The worst can happen when you least expect it, and you need to be covered for any possible incident. Financially securing your health and wellness will allow you to rest easy in the event of crippling disability or illness.

Another crucial element of your financial plan is your will. At this stage of your life, a will helps make sure that your assets are divided in a way that suits you and your family’s best interests. It also plays a vital role in naming your children’s guardians in case you are unable to raise them.

Business Insurance

You may be planning to take a step in a different direction by starting your own business.

This process can be nerve-wracking and you may be challenged regularly as you bring your idea to life. Be careful not to let a heavy workload keep you from protecting your start-up. 

Business insurance should be the first step you take. This insurance is the first priority and should come before you purchase the business essentials. Your business is an asset and its protection is key in protecting your future financial earnings.

Taking Care Of Your Retirement Years

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In the years approaching retirement, the more you accomplish the better. You don’t want to be in a position where you have to extend your time working after the normal retirement age.

Your pre-retirement years should prioritise the stabilisation of your finances. This is so you can increase your financial security in your later years.

Ideally, this would be the time where you settle financial obligations. These obligations may include elements like paying off your mortgage or your children’s university fees.

Pre-retirement is also a good time to review your portfolio and ensure your investments are producing the desired result. You want to be certain that your money will give you the returns you need in future.

The Early Retirement Years

At the beginning of your retirement, it might be beneficial to plan for all of your potential expenses. Figure out how much you will be spending to help you determine the duration that your money will last.

Consult a financial advisor and look for low-risk investments that could potentially turn your pension into income. With the help of a professional, your savings will last longer.

Late Retirement Years

Couple signing documents around a table

Make sure you are updating your estate plan regularly at this stage. The legacy you leave is sacred. Be sure that the beneficiaries in your policies and will are selected as you intend.

Look for ways to reduce expenses regarding your estate. Products like life cover can reduce any debt or taxes on your estate. This will ensure your loved ones get what they deserve.

Plan Your Future Today

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No matter what stage of life you are in, it is never too early or late to secure your finances. A healthy estate plan will grow and adjust with you and your family. 

A crucial aspect of your financial journey is who you choose to partner with you. The right financial service provider will maximise your return on investment, every step of the way. Let Maysure Financial Services help you plan your financial future today.

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To find out more about the financial stages of life contact us here:

+27 11 839 2302

info@maysure.za.com

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Financial New Year’s Resolutions: Shape Your 2021

We’re sure you’re all aware of the classic New Year’s Resolution tradition: you start out full steam ahead with planning your goals for the year and two months later, you’ve lost all motivation. What happens? Naturally, you slip back into your old spending habits and procrastination becomes enemy number one.

It’s easy to fall back into comfortable patterns, especially when it comes to your finances. But, it’s detrimental to achieving your financial goals. Avoiding financial planning often results in far more stress than it would take to set aside some time to plan your finances for the New Year.

Remember, you don’t have to do it alone. We are here to help you by shedding some light on a few key financial resolution tips and how you can stay the course.

1. Evaluate Your Finances

Knowing your financial status is a good place to start when it comes to planning your resolutions. After all, you can’t create resolutions until you know where you’ve been going wrong. Aim to form a realistic baseline idea of your current financial health status, even if it’s not exactly where you want it to be.

This means evaluating your spending habits, calculating your net worth, and reviewing your goals. These actions will tell you more about what your money is doing.

Once you have an idea of what your financial health looks like, it becomes easier to create realistic resolutions and to achieve them.

2. Plan Your Money

Following your evaluation, you can move on to setting financial resolutions that work for your money. This will put you on the road to becoming financially savvy.

But, what exactly does this mean and how do you do it?

Successful resolutions incorporate clear goal-setting and focused timelines. Outline exactly what goals you want to achieve and set an executable timeline. You are less likely to procrastinate and fail at your financial resolutions when they are clear, simple, and doable.

This does not have to be done in a vacuum. It’s advisable to reach out to all your available resources.

A financial adviser can assist you in drawing up a financial plan that establishes clear goals with executable timelines. This goes a long way to creating resolutions that give you more confidence and less stress.

Contact Maysure Financial Services for help to achieve your financial resolutions.

3. Pay Your Debts

You are now well on the path to financial savviness. Armed with knowledge and determination, you can focus on the nitty-gritty of your goals. It’s time to prioritise debt relief and not get sidetracked by debt creation.

In your financial resolutions, outline an effective budgeting strategy that aims  “to ensure that you’re spending with a purpose”. This means paying off your credit card and other outstanding debts before you plan that next big holiday.

Procrastination is the thief of time. The beginning of a new year presents you with the perfect opportunity to get into financial shape and make more down payments to secure future debt relief.

4. Plan Your Investment

Paying off debt is not the only significant aspect to consider, another easily-overlooked area is long-term investment. You may be tempted to set goals exclusively for the now, but “big picture” goals should always be in the foreground of your financial New Year’s resolutions.

Each year that goes by gets you a step closer to retirement. So, make sure you know where you want to be in the future. Resolutions don’t need to be limited to the 12 months ahead. You can make them with the next 12 years in mind.

Investment and finances are a very personal affair. There are so many options to choose from, whether it’s putting money into an investment portfolio or paying off your bond. Make the right decision for you. Discuss your options with your financial adviser to make an informed choice.

5. Review and Relearn

Finally, the best way to stay on top of your goals is to regularly review your budget and always leave space for learning. The more knowledgeable you are about your finances and the financial world in general, the easier it becomes to tackle any unexpected issues that may arise throughout the year.

Another goal you can include in your resolutions is to expand your knowledge by reading more blog posts, newsletters and finance books. If you are armed with the facts, you are prepared for battle.

Another great idea is to have a checklist that you can revisit throughout the year to ensure that you’re staying on track with your goals.

Financial New Year’s resolutions don’t have to become an exercise in procrastination, instead, they can be realistic, simple, and informed.

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Please do not hesitate to get in touch to find out how to make your money work for you:

+27 11 839 2302

info@maysure.za.com

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Reviewing Your Financial Health

It has never been more important to set goals to secure your financial health than for the upcoming year. If we can take supplements and exercise to safeguard our physical health, and work with others to improve our mental health, how can we look out for our financial health?

The best way to do that is by actively reviewing your current financial status. If your goal is to achieve healthy finances, there are a few key ideas that we recommend as a starting point. This post will explore the ins and outs of financial health and share some important tips on how to improve yours!

What Is Financial Health?

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Before we can begin to review your financial health, we must first understand what financial health means. Some describe it as individuals having sufficient cash flow for what they need and want, now and in the future.

This means knowing your current financial status, and whether or not it’s been meeting your wants and needs. So, take the time to examine your cash flow and ask yourself: does this satisfy my wants and needs?

Why Is Financial Health Important?

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This leads onto our second key idea, understanding why financial health is important. Much like the importance of planning your retirement, it gives an individual the opportunity to structure their finances to cater to their current and future circumstances.

This is especially important in today’s environment where every day can present a host of unknown variables. It’s essential to educate yourself about your finances, and to revisit this annually to adjust it to match your changing attitudes and goals.

Contact us if you’d like some help with your financial planning. We have a proven track record in helping our clients turn around their financial health.

Our client *Imraan had unstructured finances before he began his journey towards financial health. Since he has begun working with us at Maysure Financial Services, he says he is reaping the benefits of “better investment decisions, improved yields, a positive lifestyle adjustment, and financial happiness”. The right financial advisor will help you achieve these benefits and shape your wealth so that it works for you.

How Can We Achieve Financial Health?

Now, you might be wondering where to start. Luckily, we have provided four steps to help you effect successful and productive financial changes.

1. Determine your net worth

This is as simple as minusing your total liabilities from your total assets. To begin, you will need to calculate your total assets. This is anything you currently own, such as your house, your car, or other investments. Liabilities are any debt that you owe to a third party such as loans, shopping accounts, or credit card debt.

Here is a useful application to help you calculate your net worth. For those that like a working example, here’s one for you: 

Let’s say you own a car worth R160 000 and a house worth R1 200 000, this would bring your total assets to R1 360 000. For calculating liabilities, let’s say you owe around R500 000 on your house, and you have an outstanding debt worth R25 000, this puts your total liabilities at R525 000.

A formula would look like this: total assets – total liabilities = net worth. Your net worth could be negative or positive. Either way, this means you have an idea of where your finances sit and can start to evaluate your financial health.

Calculator and pen and document

2. Calculate your debt to income ratio

Now, let’s look more closely at your monthly financial status, which is your debt-to-income ratio. In basic terms, this means how much you owe each month versus how much you earn each month.

For example, if you pay R10 000 on your house bond and R2 000 on your shopping account, and earn R24 000 then your ratio for each month would be 1:2. This makes it around 50 percent. You want your ratio to be much lower, i.e. you want your ratio to be at around 20 percent, which means your debt takes much less than half of your income.

Happy, neutral, and sad faces on paper

3. Work with financial goals

Once you understand more about your financial status, you can start to set some goals about where you want it to be. This means being realistic about your monthly budgets, and ensuring that you’re not spending more than you earn. The goal here is to be able to have a steady cash flow so you can afford all your needs and wants, meaning you gain good financial health.

Effective budgeting ensures your financial resources are sufficiently distributed to cover your wants and needs. At this point, it is also very useful to seek out the assistance of your financial adviser. We can help you to work on an investment plan. Both of these in tandem will help to keep track of your spending while growing your wealth.

Saving is not as simple as just putting money away for a rainy day. It’s crucial you choose your investment accounts thoughtfully. Consider having multiple investment accounts that cater to various needs, for example, tax-free investment isn’t intended for emergency funds, but is useful for long-term investment.

4. Take a moment and enjoy your financial health

It’s easy to get bogged down with trying to save money and allocate your wealth responsibly. But, remember that it’s just as vital to enjoy your wealth by budgeting for those getaways and personal spoils. It’s possible to enjoy your finances once you have a realistic idea of your net worth, your income-to-debt ratio, and long-term goals.

This doesn’t mean allocating half of your monthly earnings to lifestyle expenses, after all, lifestyle inflation can become costly in the long run. But, rather allow yourself calculated luxuries that will still help you maintain your financial health status.

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Final Thoughts on Financial Health

Financial health is an important aspect of living that you can learn to make work for you. By reviewing your financial health, you can get more realistic about where you are and as a result, start to plan for where you want to be. Now and in the future. We are here to help you tackle ‘the how’ of financial health and make your money work for you.

Please do not hesitate to get in touch to find out how to make your money work for you:

+27 11 839 2302

info@maysure.za.com