Rising inflation, increasing electricity tariffs, and the possibility of an interest rate hike are causing financial stress for many South Africans.
This stress can have a significant impact on well-being and relationships. However, according to Lee Hancox, head of channel and segment marketing at Sanlam, there are certain financial habits that can help alleviate some of the stress and empower individuals to feel more in control of their finances.
Financial stress can have a debilitating effect on emotional and physical wellness, making it crucial to address it head-on.
Hancox suggests seeking the assistance of a financial planner who can provide a practical step-by-step plan to navigate tough times without compromising future financial goals.
One effective strategy to minimise financial stress is goal setting and creating vision boards. By documenting short, medium, and long-term goals and creating a plan to achieve them, individuals have something to look forward to and can stay motivated.
These goals can encompass various aspects of life such as health, mental well-being, social life, career, travel, personal growth, and finances. A financial planner can assist in developing a roadmap to reach these goals.
Another important aspect is being honest with oneself. Understanding the current financial situation is crucial in addressing challenges effectively.
This involves reviewing income, expenses, and debts to gain clarity on where money is being spent and identifying areas for adjustment. While this requires discipline, there are budgeting apps available to help.
Additionally, banks provide the option to easily retrieve monthly debits on online banking profiles, expediting the review process.
Financial stress is a reality for many South Africans, but some steps can be taken to alleviate some of the pressures and regain control over finances. Seeking professional advice, setting goals, and being honest about one’s current financial situation are key strategies to minimise stress and work towards a more secure financial future.
“Focus on necessities like food, housing, and utilities first. This might involve reducing entertainment expenses or finding more affordable alternatives.
For example, do you really need 150 channels when you only watch 60? Contact service providers to renegotiate premiums or change subscriptions and, where there are better options, you may consider changing service providers,” said Hancox.
Pick an approach to debt reduction and see it through
Life is expensive, and, often, the end of the month sees many of us digging into our overdrafts or resorting to credit cards. This can end up as a vicious debt cycle - interest accumulates, making it more expensive to buy on credit, and harder to service the growing debt.
Unless a purchase is a “need” rather than a want, it can probably wait. You could use part of your bonus or windfalls strategically to pay down debt.
Negotiate with service providers to reduce interest where possible or renegotiate payment terms if you are absolutely struggling to repay. Eradicating debt will not happen overnight, so remain steadfast and consistent.
If possible, see if you can generate extra income
Explore ways to boost your income, such as acquiring new skills, pursuing career advancement opportunities, or starting a side hustle. A part-time job, freelancing, or selling items you no longer need are also options.
You might need to upskill to increase your earning potential. There are many online resources available with free or low-cost training. It also helps to keep an income-generating idea simple, for example only offering one simple product you know your community needs.
Prioritise self-care
Financial stress can take a toll on your mental well-being. Prioritise self-care activities like exercise, meditation, hobbies and spending quality time with loved ones to reduce stress and improve your overall outlook on life.
Seek support
Seek out professional financial advice tailored to your needs that will help you develop a plan to manage your finances more effectively. Engage with community or governmental organisations that may provide resources or support in times of financial distress.
To improve your finances and overall well-being, you can take small, proactive steps toward managing your financial stress, seek support, and follow healthy coping strategies.
“With a professional in your corner, a solid plan in place and commitment to see it through, you will be well on your way to financial success,” she advised.