COVID-19 has impacted every single person on the planet and has urged people to start planning for the future financially more than ever before.
If this pandemic has taught us anything, it’s that having a secure financial plan in place is the most crucial part of preparing for the worst-case scenario.
The rate at which this pandemic has closed economies, businesses, borders and restricted day-today activities has shown us that our entire lives can be turned upside down with very little warning.
As daunting as this time has been for people in our country and across the globe, it’s safe to say that the pandemic has truly unveiled the importance of financial planning and the value of using a professional financial planner.
Having said this, our financial planners have acknowledged that, along with all other industries, the financial planning industry has changed forever and we have put together a list of how we can help you plan differently in order to be prepared for major events that can affect you negatively.
The COVID-19 pandemic has highlighted the importance of ensuring that your investments are well-balanced between discretionary investments and retirement funds.
In other words, you should make sure that not all your investments are held in compulsory funds. Having quick and easy access to capital has become more important, despite the obvious tax benefits offered by a retirement fund.
Annual financial reviews are as important as your bi-annual check up with your doctor. These reviews allow us to find ways to cut costs and increase the value of your investments, based on current happenings.
Being under lockdown, unable to work, has shown many South Africans why it’s important to take every opportunity to cut back on unnecessary spending, without jeopardising their level of cover.
The entire estate planning process is intricate by nature, and trying to update living wills, setting up trusts, setting up business succession plans and ensuring estate liquidity can prove to be near impossible while under lockdown.
We should never wait until there is a crisis before we ensure that our estate plans are up to date and all relevant documents are organised and filed.
You may have thought before that there is no way that you can adjust your current budget to minimise unnecessary spending.
Or, you haven’t had a budget in place, making it impossible for you to properly track where your money is going to every month.
Either way, it has become almost painfully obvious that a well thought out budget that you review regularly can be your saving grace in a crisis.
Although it’s always tempting to open an account at your favourite store, to upgrade your car to something a little more comfortable, pay for your overseas trip with your credit card, debt is your worst enemy.
Bad debt doesn’t just disappear, not even in the middle of a pandemic or global economic crisis. However, the sad reality is that our income is always at risk of disappearing, but if we are used to living within our means, then we are better equipped to adapt to such an unfortunate circumstance.
As we now know, anything can happen and, when it does, it happens fast. Now is the time to stop wondering if life cover is necessary.
Life cover is a key component of estate planning which aims to make sure your outstanding debt is paid and your family and loved ones are looked after should you be deceased.
The pandemic has shown us that death is a part of life and life cover should be high on your list of monthly expenses.
The same applies to income protection which serves to provide you with a set monthly income should illness or disability hinder you from working.
With retrenchments on the rise and many employees being forced to take their annual leave, it’s important to understand the details of your employment contract.
Are you contributing to the Unemployment Insurance Fund? What package are you entitled to upon retrenchment? Do you have retrenchment cover? Knowing the answers to these questions can help you brace yourself for potential retrenchment.
Saving for a rainy day is not just a metaphor. Rainy days exist and can happen to anyone at any time. For this reason, our financial advisors will always encourage you to put as much as you can away into an emergency fund which is easily accessible in times of need.
Your emergency funds will quite literally be your safety net, ready to catch you when you take an unwilling financial fall. These funds are there to protect you from having to incur further debt to cover your living costs and will prevent you from reaching into your retirement funds because you had no other choice.
The rule of thumb is to have between 3 and 6 months’ worth of income in your emergency fund. This is not an exaggeration but rather a calculated amount that will more than likely see you through some of the hardest times.
Planning for the future financially is absolutely imperative if you want to see yourself and your family through a crisis.
Our professional and qualified financial advisors are equipped with extensive market knowledge and experience to help you plan for your future without breaking the bank.
If you would like more information on how you can better plan for your financial future, please feel free to contact our financial advisors. We are able to assist you telephonically or electronically during this time.
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