By Happy Ngale, Alexander Forbes Financial Planner

Financial well-being means being able to manage your expenses within your budget, avoiding excessive debt and building savings and assets. To achieve this you need to look after your health, prioritise your needs and have a plan to protect yourself and your family from financial shocks, Seeking financial advice can be an important part of this process. Financial well-being means being able to achieve what matters most to you throughout your life.

Every generation wants to be able to manage their expenses, debt and achieve their goals.

While blanket descriptions exist for different generations, the character and behavioural descriptions are often stereotypical. Regardless of trends that different generations may lean towards, there are fundamental issues that resonate which each age group. The communities we grow up in, how we are raised, the values system and culture all influence our decision on what matters to us. For millennials, social media influences could play part in shaping what we value the most.

Most African families take care of each other – and that is why we have terms such as “black tax”. This could mean baby boomers as well as millennials, who are supporting their parents or their sibling. There may be a small difference in the values system and priorities between different generations, however financial well-being has the same outcome for everyone.

It is possible to strike a balance between taking care of the important things and still get to enjoy life the best way you know how.

No matter what differences there are in what people value the most, the pillars that create balance for any individual’s financial well-being are the same – emergency savings and income replacement.
Any individual in any generation should be able to finance an emergency. If there is a need for co-payments on medical aid, or your car breaks down, to maintain financial well-being you need to be able to finance that emergency. Inability to do so, pushes people into ongoing debt.

If you are retrenched, or become disabled or when you retire, income replacement asks if you will be able to afford your expenses and other important bills? What income replacement solutions do you have in place in order to maintain financial well-being? Ability to maintain a stream of income for any household is of fundamental importance. And that is why the message of retirement savings is so important. Perhaps the message has always sounded like people need to stop enjoying living life when they are younger in order to be comfortable when they retire, and that is why people struggle to identify with this message. But if there could be an understanding that retirement planning is like any other income replacement solution in a savings format, the message would be accepted.

No matter what each generation finds it important to spend money on, the fundamentals should not be ignored and the basics remain the same.

ENDS

www.alexanderforbes.co.za

Issued by Corporate Image on behalf of Alexander Forbes