Financial Education

4 ways to build your financial security

With so much uncertainty in the world at the moment, you can take steps to increase your sense of financial security.

Article Image

Building financial security is about taking actions that will give you more peace of mind. The more prepared you are for risks and unexpected events, the more peace of mind you'll have.

Here are 4 things you can do today to kick-start your journey to financial security.

1. Start saving for emergencies

Emergency savings are savings you set aside for unexpected events or expenses, such as a big repair, a medical emergency or a loss of income. These savings create a buffer that can help you to avoid using debt or dipping into long-term savings if something unexpected happens.

So, how big should your emergency savings be? Everyone’s financial circumstances are different; however, a good rule of thumb is to save enough to cover 3 – 6 months of expenses. This may sound like a lot of money to set aside, but it is achievable! Start by putting away a small amount each month – as your savings grow, you’ll feel more prepared.

2. Review your insurance

You can’t anticipate and save enough to cover every possible risk, but having the right insurance in place could help you cover the bigger risks and can immediately increase your security. 

Take time to review any policies you already have and consider whether these meet your current needs. Prioritise what is essential to protect your family and your income. If you need help deciding what insurance is right for you, you may wish to speak to an FSCA-registered financial adviser.  

3. Keep up your long-term saving and investing

If you contribute to a retirement savings product or a unit trust investment, times like these can feel very scary. Investment values have been very unstable as a result of the extensive and unpredictable effects of the pandemic, and may continue for some time to come. However, if you are investing for a long-term goal, try not to let these changes affect you. If you can, stay invested and keep investing a little every month.

Before you decide what is right for you, you may wish to speak to an FSCA-registered financial adviser about your decision.

4. Build your financial knowledge

Investing in your financial knowledge will help improve your financial security for the rest of your life. The more you understand about managing your money and making the most of the options available to you, the more in control you will feel. It will also become easier to make decisions that build your financial health and help you avoid easy mistakes, giving you greater peace of mind not just over the short term but well into retirement too.

It’s not possible to learn everything all at once, but if you add to your financial knowledge regularly, you'll reap the rewards for years to come.

One way to boost your financial know-how is to register for Capitec’s Live Better Academy. The platform offers 4 courses: becoming money smart, saving, budgeting and managing debt. The courses are designed to help you take control of your financial future, reach your goals, and create financial security. Register now, it's free!



Was this article helpful?

you may also like...

View All Other Articles View All
build your money know-how

build your money know-how

One of the most simple and effective changes you can make to build your financial security is to improve your money know-how.

Read More
Tax-efficient way to boost savings

Tax-efficient way to boost savings

In South Africa, there are 2 excellent ways you can get a boost to your savings, courtesy of the taxman. Here is how you can boost your savings.

Read More
save to spend: get what you want for less

save to spend: get what you want for less

It sometimes feels like good budgeting means spending as little as possible on things you want, and only on things you need. But a good budget should help you plan and prioritise your spending so that you can spend on the things you want, without compromising your well-being or your future.

Read More
compound interest: why time is literally money

compound interest: why time is literally money

Compound interest is what makes money grow. When you save money it can work for you and when you borrow money it can work against you. A thorough understanding of the concept is an essential tool for your financial toolbox.

Read More
View All Other Articles

browse more articles

Related Articles All Articles