Here’s how to have a financially empowered year ahead

Metropolitan’s web series campaign, ‘We Start 2022 Stronger’, says financial stability can be acquired with good habits and the right information

An episode of ‘We Start 2022 Stronger’, which shows how you get the most out of your insurance.
An episode of ‘We Start 2022 Stronger’, which shows how you get the most out of your insurance.
Image: Supplied/Metropolitan

A new year means new beginnings, possibilities, opportunities, chances and experiences. 

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 fundamental to a better future.

If the last two years have 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” is Metropolitan’s campaign aimed at equipping consumers with knowledge to manage money better and make them feel in control.

Being in a confident, knowledgeable head space will help you worry less, empower you to think more clearly and make better choices, while being supported by other people who understand the struggle and also want 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 diverse and can lead to overwhelming contrary opinions and options that may not be aligned to your needs and financial goals. Working towards financial stability is a process which 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 behaviour to become a habit. If there was ever a good time to start working towards your personal financial goals and cultivating some financial discipline, it’s now. Insurance premiums such as life cover, savings and investments can help you have a financially strong 2022. 

The importance of life insurance

For most people, preparing for the unknown is the best place to start. 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. 

WATCH | Episode 3 of ‘We Start 2022 Stronger’

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 as funeral costs that can easily run into thousands of rand. You don’t want your loved ones to be left with an extra financial burden in addition to the emotional turmoil, should you pass away. 

No amount of money can ever replace a person, but life insurance can help provide protection for the uncertainties in life. Having life cover will bring you and your family peace of mind. It protects your loved ones from the unknown and helps them through an otherwise difficult time of loss. 

The art of saving 

Saving can be difficult. But saving even a little for a rainy day is essential because a solid savings base can cushion you from life’s uncertainties. A plan for savings should begin at the budgeting stage.

The recommended approach, by most financial experts, is the 50-30-20 rule.  According to this, you should allocate 50% of your income to essential expenses or needs such as living, food and other expenses; 30% towards personal expenditure or wants, such as luxuries and leisure; and 20% towards savings or financial goals, such as investments.

It is important to know 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. Remember, a penny saved is a penny earned.  

Make your money work for you, invest

Gone are the days when people used to rely only 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 a locker may not serve its purpose, because 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? The answer is to invest your money. Investments have the potential to help you meet your financial goals such as purchasing a house or retiring comfortably. 

Investing instils a sense of financial discipline as you develop a habit of setting aside an amount every month towards your investments.

There is no one-size-fits all when it comes to investment plans. The investment choice depends on factors such as age and financial goals. It is good to invest after conducting proper research and understanding the available options adequately. 

Let the experts help you 

With all of these options to think about, it’s no surprise that finances make many of us feel anxious. We’d rather not think about it and hope the situation will somehow magically sort itself out, or commit to fixing it later.

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. 

This article was paid for by Metropolitan.