A recent Allan Gray article outlines ways of dealing with financial stress by having a “financial wellness day off”. Below is a summary of the salient points.
South Africa has seen an improvement in consumer confidence although many remain under tight financial pressure with escalating prices and lower salary increases. Added to this, South Africans are generally highly indebted and have low savings, which increases pressure and contributes to stress.
In a recent study by PWC in the USA, it found that 53% of full-time employed adults are stressed about finances, far ahead of their jobs (17%), personal relationships (15%) and health (14%).
Finances led to 48% being distracted at work leading them to spend three to five hours every week thinking about finances or dealing with personal finances. As much as 16% of respondents missed work due to finance issues.
As finances lead to stress and affect one’s health, some USA companies are introducing a ‘financial wellness day’ giving employees a day off to attend to their personal financial issues.
South African companies are looking at programmes to encourage healthier lifestyles but are not yet looking at financial stress on employees. The best would be to take a day of annual leave to attend to your personal money matters without work pressure.
What to do on your financial day off:
Create or review your budget
Prioritise your debts. Pay off those with the highest interest rates.
Set up an emergency fund with the goal of saving the equivalent of three to six months of monthly salary.
Review your insurance cover, both short- and long-term.
Review your existing investments to ensure that your risk profile and goals are still aligned.
Focus on estate planning to ensure that your Will is current and that you have prepared adequately for your estate and beneficiaries.
Do your tax return. Tax returns need to be submitted online by 31 October 2018.
Speak with a financial advisor. A good, independent financial advisor will help you develop a financial plan customised to your situation and needs and help you choose the right investment products to achieve your goals.