Kendrick Lamar famously rapped, “Money trees is the perfect place for shade”, strongly hinting that a solid financial foundation is the solution to a life free of stress. Although this lifestyle may be a reality for rap gods like Lamar, most of us are so far away from even planting a money tree seed, let alone seeing it blossom or even knowing what it looks like. This is confirmed by the fact that only 54% of SA’s are thinking of their future finances, and over a third of South Africans have no retirement plan whatsoever.
So, according to Tumelo Moea, Regional Manager: Gauteng at Metropolitan, the only way to plant the money tree seed is to get to grips with building a future where “money aint no thang”. That means understanding how money actually works if you ever want to create goals, achieve dreams, and secure a future.
“If you want to feel truly free instead of stuck in a rut, you’re going to need some money in the bank and the basic financial knowledge to keep that money growing and protected in all the right ways,” says Tumelo. “And that all begins with choosing the right set of financial products.”
So, get comfortable and settle in because it’s time to dive headfirst into the building blocks for financial freedom, starting with…
Funeral Cover
Now this one should hit close to home for many of us. Nobody likes to think about it, especially those who are young enough to think they are invincible. Yet, the reality is funerals can be expensive, costing anywhere from R10 000 to R150 000. And so it is super important, because, besides taxes, we know what else is inevitable for us all.
Tlou explains that a proper funeral cover helps ease the financial burden on your loved ones during a difficult time. It provides a lump sum payment to cover funeral expenses, allowing your family to focus on honouring your memory instead of worrying about money. That should be the last thing on their minds.
When the chairs are packed away and the food has been packed into containers, what then, you ask, about the ones who depend on you? Where do they go from there? That’s where life cover comes in…
Life Cover
They say you don’t know what you’re missing until it’s gone. Your children, your parents, your cousins, your dogs and cats – all of them may depend on you to live the life they’ve gotten used to. Don’t let their dreams die with you. Life insurance is the safety net that provides a payout to your loved ones in the event of your death. It gives them a financial boost when you're no longer around, so they can keep living the life you've always wanted for them.
Tlou explains, “while we all yearn for a long life, the world can be cruel and unpredictable. You never know when tragedy can strike, leaving your family stuck.”
That being said, you might live for a long time to come, so what happens to you financially when you are too old to work? How should you prepare for that while you’re young?
Retirement Saving
“I know retirement might seem like a lifetime away, especially when you're young and living your best life, but trust me, it's never too early to start planning for life’s greatest party,” advises Tumelo.
Retirement products like pension funds and retirement annuities allow you to save and invest for the future, ensuring you can enjoy your retirement without financial worries. But now you’re wondering how much you need to save. Well, Tlou says that is really up to how much you can afford.
“Even as little as R250 per month towards your retirement can go a long way if you start saving early enough. Of course, the amount you save is going to depend on the lifestyle you want to maintain and the specific needs you or your family may have as you get older,” says Tumelo.
However, Tumelo says you have to consider the cost of maintaining the home you want to grow old in, the car you will drive, the world you want to explore and whatever else needs to be ticked off your bucket list.
“Remember, securing a financially stress-free future is within reach for anyone who's willing to put in the effort and make smart decisions with their money. So, take control of your finances today and start building that money tree. That’s what it means to feel financially free,” Tumelo says.
PERSONAL FINANCE