Take care of your mind, body, soul and wallet to be financially independent

Getting well and staying well are hot topics right now, and rightly so. It’s weird to think we’ve had to put up with everything Covid-19 and the lockdown has thrown at us for almost 600 days already. It is clear from informal conversations, even sometimes with strangers, that the pandemic and the lockdown are having an impact on everyone. This impact remains to be defined and quantified, but all we can be sure of now is that the world’s greatest psychological experience is unfolding before our eyes.

The beauty of the human race, however, is that we are constantly learning and adapting, and often passing these learnings on to the next generation. Encountering a global pandemic will be a lesson and lead to growth akin to making fires, treating indigestion, or learning to avoid the pitfalls of investing – it’s all part of our journey.

To contribute to this cycle of learning and development, I have put together a guide with some tips on how to manage your finances and avoid proven mistakes on the road to financial well-being …

Start Now: Compound Interest Is Your Friend

I get it, being on the cusp of adulthood is hard enough and figuring out how to save and invest can be overwhelming for anyone. The math of investing, however, speaks for itself. Albert Einstein said that “Compound interest is the eighth wonder of the world. Whoever understands it, wins it … whoever does not understand it, pays it. His use of pronouns is a sign of his time, but the concept remains just as relevant today.

The earlier you invest, the more interest you will earn, which will translate into more interest earned on that interest… you get the picture.

Don’t worry about how much you have to save – just save

Don’t let the amount of savings you need to invest keep you from investing. Mutual funds, as investment vehicles, can be purchased for as little as R250 per month and offer a wide range of solutions to better match investors’ risk and return objectives. And, once you have a little more, you can easily increase that amount, or start another investment entirely.

Don’t let your partner manage your money without your involvement

Ownership of your financial independence should not be underestimated or minimized. I witnessed the reality of this lesson when my friend’s father fell ill and her mother could not manage her household finances. She just hadn’t been aware of this type of information for most of their relationship.

My advice, especially to women, is to take ownership of your success and take responsibility for managing your finances successfully.

And if you’re not financially savvy and worried about how you’ll be able to manage your finances, seek help from a financial advisor, but be sure to ask as many questions as possible, do your own research and stay informed about what is going on with your money.

The same is true if that person is a loved one instead of a Certified Financial Planner – you should always ask questions and know how your money is being handled.

Don’t withdraw your pension fund in cash when you change jobs

Women progress and fearlessly seek employment opportunities. Go girl! … But, in the process, don’t compromise on your long-term financial planning goals by not acknowledging all the financial implications.

When you change jobs, the money you’ve contributed to your pension fund becomes available for you to withdraw – and that’s very tempting.

But withdrawing your retirement funds will require you to start all over again. Perhaps more importantly, you forgo winning the Eighth Wonder of the World and there are possible tax implications. The good news is that financial service providers offer financial products such as retirement annuities (RAs) and preservation funds as solutions, which allow you to preserve your money while you move into your new boss role. .

Budget and move forward

You can’t pour into an empty mug, and the same goes for your money. Your savings don’t increase dramatically unless you make a commitment to maintain your proverbial piggy bank. Not allocating enough funds for your future or for emergencies can get you in trouble later.

Life is coming. Pandemics are coming. Take the time to analyze the behaviors that are keeping you from saving more.

Overspending can be your arch enemy, but it can be brought under control through financial budgeting and applying a disciplined approach to your expense allowance. The original boss, Sophia Amoruso, said in her autobiography: “Money looks better in the bank than at your feet.”

Now I’m not saying don’t buy the shoes… just buy them after you’ve properly allocated your investments. And preferably on sale.

Ladies, take care of yourself and others. Take the time to invest in your well-being, body and mind, but don’t neglect your finances. Investing is personal. Dream big, sister. Your time is now.

Ali Simpkins is a Chartered Financial Analyst and MCI Specialist at Momentum Investments

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