Alleviate Financial Stress and Get Your Financial Affairs Back On Track

Many are battling to manage their money well. Debt, cash flow crunches, and no nest egg for the future can cause one to be despondent and feel stressed out. However, you can make a few changes to your money management that can alleviate many of your stressors, and help you build toward financial freedom.

You Can Alleviate Financial Stress and Get Your Financial Affairs Back On Track!

The Statistics

In a 2022 survey conducted by Deloitte’s, the statistics show that 29% of Gen Z’s (those under the age of 22), and 36% of Millennials (those aged between 22 and 40) are concerned with having enough money to cover their basic cost of living (e.g. housing, transport, and bills).

In the same survey, 46% of Gen Z’s and 47% of Millennials indicated that they live from paycheck to paycheck, and that they are worried that they won’t be able to cover their expenses.

The latest studies done on the working population in South Africa also show that many are dangerously underinsured and do not have sufficient life and disability cover in place for their personal and family protection.

Today, you may feel financially insecure. You may not have adequate financial protection or savings in place. The good news is that you can turn your financial affairs around by implementing a few simple solutions.

The Tale of Two Friends

Meet Peter and Paul. Both are 30 years old, married with two children. They both studied journalism and work for a well-established media house and earn average salaries.

While both Peter and Paul are in a similar position, their financial affairs look very different…

 Peter:

• Peter does not budget.
• Peter has no goals or plans.
• Peter lives a good life, goes out for supper twice a week, takes regular weekend breaks, and has the latest gadgets and trendy clothes.
• Peter drives a BMW and rents an upmarket home in the sought-after city district.
• Peter has maxed out his credit card and is debt-ridden with a good share of his income going to pay off his debt.
• Peter has no savings for short-term emergencies.
• Peter has no retirement savings.
• Peter has no insurance for his personal or family protection.
• Peter has no provision for his children’s education.
• Peter lives for the moment. He is often stressed out and is battling to make ends meet. 

He feels financially insecure.

Paul:

• Paul has a budget in place and takes a disciplined approach to his money matters.
• Paul took Penny, his wife on a date night, and they discussed their dreams and aspirations. They have a dream and a plan, and have set goals over the short, medium, and long term.
• Paul and his family live frugally. They go out twice a month, but watch their spending. While Paul would love to drive Peter’s car, he is content to drive a second-hand Toyota. Paul has a small home in the suburbs. Instead of paying rent, he is slowly paying his bond off. However, his bond repayment is lower than Peter’s rent…
• Paul has a credit card, but chooses to not get into debt. He decided not to spend unnecessary money and not to create a habit of bad debt.
• Peter has savings set aside in his bank account to fund his short-term emergencies. He even has surplus cash set aside for the family holiday at the end of the year.
• Paul has sat down with a financial advisor and has calculated how much he needs to put away so that he can retire at age 65. He has set up a monthly debit order that comes off his bank account at the beginning of each month that goes directly into his retirement investment fund.
• Paul also has adequate insurance in place. He has enough life cover in place to settle his bond and to provide for his family in the event of his death. He also has suitable income protection disability cover in place to cover his income if he is unable to work due to sickness or disability. He has a healthcare plan to protect his family too.
• Paul also has an investment plan in place to fund his children’s education and to build up a nest egg for an overseas family holiday in 7 years’ time.
• Paul lives within his means. While his disciplined financial plan may seem a little restricted at times, he is not stressed out, enjoys his life, and always has extra money left in his bank account at the end of the month.

He is financially secure and has a plan in place to ensure a bright future for his family.

Peter may seem to be more successful.

He has the cool apartment and car. He may look like he is living the good life, but he has no protection and no planning for the future. He is often left with more month than money. He is debt-ridden and has no assets. Deep down he is anxious and battling to break free of the cash-strapped cycle.

Paul on the other end is content. While he has made some sacrifices, his disciplined approach to his money management is allowing him to build up his wealth plan. Deep down he is satisfied and excited about his future.   

How are You Managing Your Financial Affairs?

You may be battling to make ends meet. You may have poor financial habits, limited savings, and huge debt that is eroding your cash flow.

Do you want to turn your financial affairs around?

You can!

Building Blocks to Financial Freedom

I want to share 7 building blocks with you that can help you reduce money pressure and help you get your financial affairs back on track.

1. Manage Your Money Well:

You need to know what is happening with your money. If you can measure your money, you can manage it.

So, it is important to…

1. Set Up a Budget:

Your BUDGET is basically an itemized summary of your INCOME and your EXPENSES and will reveal whether you have a positive or negative CASH FLOW.

• Track all your expenses.  
• Study your bank accounts. They don’t lie!
• What items in your budget are essential? Which items are nice-to-haves?
• Do you have any spending leaks? What can you eliminate from your budget?
• Your budget will show you what your CASH FLOW is like and reveal where your hard-earned money going.
• You need to free up space in your budget in order to build in PROTECTION, SAVINGS, and INVESTMENTS so that you can BUILD towards FINANCIAL FREEDOM.

2. Your Balance Sheet:

Your BALANCE SHEET is basically an itemized summary of your ASSETS and your LIABILITIES and will reveal your WEALTH PORTFOLIO.

• You need to list your ASSETS – WHAT YOU OWN (SAVINGS and INVESTMENTS)
• You need to list your LIABILITIES – WHAT YOU OWE (DEBTS)
• There is only one way to build up your WEALTH PORTFOLIO – You need to squash your DEBTS and EXPENSES, and you need to get into a regular HABIT of converting more of your INCOME into ASSETS. This in turn will help you BUILD UP your WEALTH PORTFOLIO and set you on a path to FINANCIAL FREEDOM.

2. Have a Plan:

You need to have a forward VISION.

Where do you want to be in 5 years from now? What are your SHORT-TERM OBJECTIVES? What are your MEDIUM-TERM GOALS in the next 10 to 20 years? What are your long-term DREAMS?

• Where are you NOW?
• What are your FUTURE PLANS, OBJECTIVES, GOALS, and DREAMS? Where do you want to be in 5 years, 10 years, or 25 years?
• How can you get from where you are, to where you want to be?
• What needs to change?
• What is working? What is not working?
• Get ADVICE on how best to construct your WEALTH BUILDING PORTFOLIO.

3. Build Up a Reserve Fund:

It is important to build up short-term savings to ensure that you have money available for emergencies and opportunities that may arise.

• Things break down. Storms hit. Unforeseen EMERGENCIES seem to happen at the wrong times. OPPORTUNITIES also arise out of the blue.
• It is vital to have accessible money available to assist you during these times. If you don’t, you may be forced to take on debt during tough times to keep your head above water. Also, you may be held back from possibly making use of opportunities when they present themselves.
• You need to build up a savings plan that can act as a safety net.
• I suggest that you build up at least 3 MONTHS’ SALARY. This will ensure that you have money available when needed most.  

4. Risk Protection:

In event of death, disability, or sickness, will you and your family be able to survive financially? Are your assets protected? Make sure you get advice and that you have adequate risk insurance in place to protect yourself, your family, and your assets, in event of a tragic event.

You need to ensure that the following are protected…

1. Needs On Death:

Who will look after your family in the event of your death? Will they be provided for?

• Do you have a Will? Your Will will speak for you when you are not there to speak for yourself.
• I suggest that you have sufficient LIFE COVER or savings to cover your DEBTS and provide for FUNERAL and ESTATE EXPENSES in the event of death.
• It is also vital to ensure that you have sufficient LIFE COVER to PROVIDE FOR YOUR LOVED ONES INCOME EXPENSES in the event of your death.

2. Needs On Disability or Illness:

If you are not able to work due to temporary or permanent disability, how will you survive?

• I suggest that you have sufficient DISABILITY and SEVERE ILLNESS COVER or savings to cover your DEBTS and to provide for CONTINGENCY NEEDS in the event of disability or illness.
• It is also vital to ensure that you have sufficient INCOME PROTECTION DISABILITY COVER to COVER YOUR INCOME NEEDS in the event of your disability.

3. Healthcare:

Do you have adequate health cover and insurance in place to cover sickness and potential hospitalization for you and your family?

• I suggest that you have sufficient HEALTHCARE COVER in place for family protection.

4. Asset Protection:

Are your assets and valuables insured in event of FIRE, THEFT, or ACCIDENT?

• Is your HOME INSURED?
• What about your CAR, PERSONAL POSSESSIONS, and your VALUABLES?
• Please ensure that you have adequate insurance in place to protect your assets.

5. Squash Your Debt:

Debt causes stress and heartache. It steals your cash flow. It prevents people from attaining financial freedom.

• Personal loans, credit cards, and store cards can wreak havoc with your cash flow.
• Not only do you need to pay off the debt, but the interest too.  
• I want to encourage you to do everything possible to SETTLE your debt.
• Do you have any “stuff” at home that is just taking up space that you can possibly sell, with the aim of using the cash to SQUASH your debts?
• Can you use your talents and time to build up additional income streams that could be used to ATTACK your debt?
• Can you CUT unnecessary expenses from your budget to get rid of your current debt?
• Don’t buy on credit. Don’t take the “buy now pay later” offer.
• Think twice before you spend your money. Ask yourself,  “Do I really need this?”
• Don’t take on new debt. Consider your options.
• Face your debt. Declare war on your debt. It is time to manage your money differently. 
• By settling your debt, your cash flow will improve, your joy levels will rise, and you can free up cash flow to build towards a more fruitful financial future.

6. Invest to Build a Wealth Portfolio:

It is important to invest over the long term to build up your asset base if you want to reach financial freedom.

• Without a dedicated long-term investment strategy, you will also not be able to RETIRE. The earlier you start investing for your retirement the better. When would you like to retire? How many pay cheques do you have left until you retire? Are you investing enough to be able to retire financially secure? Are you using your tax incentives to build up your wealth for retirement?
• What about your children’s EDUCATION? What about your long-term DREAMS? Are you investing enough?
• Over the LONG-TERM you can benefit from the POWER OF COMPOUNDING if you do not draw your money, but let it continue to reinvest. When you allow your money to remain invested over the longer term, you gain interest and growth, not only on your investment, but also interest on interest and growth on growth. Over time, the benefit of compounding can generate EXPLOSIVE EXPONENTIAL GROWTH.
• INVEST REGULARLY. Don’t draw your growth investments early. Invest over the long term.
• DIVERSIFY your investments. Don’t keep all your eggs in one basket.
• Get ADVICE on how best to construct your WEALTH PORTFOLIO.

Related post: The All-Weather Investment Portfolio – The investment strategy that has stood the test of time.

7. Advice:

1. God

You don’t have to face your battles in life alone. Invite God to lead and guide you. He wants to be part of your life. He made you one of a kind. He knows you. He wants to see you excel and be the best you.

• Consult God. He wants to lead and guide you on the best path for your life
• “The LORD says, ‘I will guide you along the best pathway for your life. I will advise you and watch over you.” (Psalm 32:8)
• Remember there is more to life than just the here and now. God made you to share eternity with him. Don’t get overly fixated with only your life on earth. Make certain of your eternity.

Is your eternity uncertain? If you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.

2. Get Advice

Sit down with a financial planner who can help you review your current needs and objectives and help you construct a Wealth Plan.

• “Listen to advice and accept instruction, that you may gain wisdom in the future.” (Proverbs 19:20)

In Conclusion

Small changes made day to day, over the long term, can lead to huge positive results over time.

By gaining control over your financial affairs, you can alleviate stress and get your financial affairs back on track.

“A person without self-control is like a city with broken-down walls.” (Proverbs 25:28)

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5)

May you be greatly blessed and highly favored.

May your future be fruitful.