Supporting a family? Here's a financial checklist
A recent survey from Women24 revealed that over 60% of South African women are primary caregivers and financiers. Shouldering the financial load for a family is a task that requires careful planning and a lot of hard work and we salute each and every one of you. To help you get your finances on track this year we drew up this checklist.
Day-to-day medical expenses and hospital bills should be covered by a medical aid. If you cannot afford a full medical aid opt for a hospital plan only but then be sure to have some savings set aside to cover doctor and dentists bills etc. Remember that without some sort of medical aid and medical savings you will be forced to reach for a credit card to cover medical expenses - a big no-no.
Where would you be without your car or laptop? How would you replace your television or cellphone if they were stolen? Because sometimes the worst does happen you need to insure your vehicles, household contents and portable possessions against fire, theft and damage. Be sure to take full advantage of the benefits that come with most insurance policies, for example emergency roadside assistance. In an uncertain world short-term insurance is about protecting yourself against risk.
Don't give in to the temptation to sacrifice your retirement savings as you battle to pay a pile of bills every month. Speak to a financial planner about how much you should be saving towards your retirement and where you should invest your hard-earned rands and cents.
Top tip: Before you take advice from a financial services provider or advisor ensure that they are registered with the Financial Services Board (FSB). You can contact them on 0800 110 443 to check if your advisor is registered be sure to have their FSP number or ID number on hand.
Experts recommend that you have at least 3 6 months living expenses squirreled away to take care of emergency expenses like car and home repairs. With the savings you need to cover unforeseen expenses you won't be tempted to reach for your credit card or take out a personal loan. Your emergency fund should also protect against loss of income due to retrenchment.
You should also be saving towards short-term savings goals like a new couch, your next holiday or winter clothes for the kids.
As your family's primary breadwinner you cannot overlook life insurance. In the event of your untimely death your life insurance policy will pay out, giving your family the funds they need to cover living expenses. You should also consider disability insurance, which will provide financial compensation if you are ever disabled by illness or an accident and unable to work. Last but certainly not least is dread disease cover, which pays out if you ever contract a serious illness like cancer.
Top tip: Have you drawn up a will? It could take years to wrap up your estate if you die without a will, leaving your family financially stranded.
Perhaps your golden rule this year should be to avoid the debt trap. If you find yourself slipping into the red every month update your budget and cut corners where you can read these savings tips if you need some saving inspiration. Save for big expenses - do not allow yourself the instant gratification of a credit card purchase. And lastly, don't forget to spoil yourself where you can you deserve a little something special.