As we celebrate 29 years of democracy, it’s appropriate to ask, what does financial freedom look like to up-and-coming South Africans? Do they believe they’re on track to achieve it, or is it a distant dream?
We asked three individuals to share their experiences of managing their finances, top tips for achieving their goals, and areas where they need guidance.
Tip: Knowing your credit score is a crucial first step towards financial savviness, and financial freedom.
Abigail Moyo: Financial freedom means living debt-free
Twenty-six-year-old public relations officer Abigail Moyo defines financial freedom as living a debt-free life. Her finances, she says, were a problem in the past, but she has made significant progress.
“I was barely making it from one month to the next, until my partner sat down with me and taught me how to draw up a budget,” Abigail explains.
She believes she’s now “30% on track” for achieving financial freedom, having accrued short-term and long-term savings, a retirement annuity, and life and disability insurance.
Investments and an education fund are the next goals on her list, and she is keen to receive advice on the pros and cons of investing in property and setting up a side hustle.
Abigail’s top tips for financial freedom are:
- Draw up a budget, and stick to it.
- Pay off your cell phone contract.
- Ditch unnecessary accounts and subscriptions.
- Be mindful of your wants versus your needs.
- Contribute at least 15% of your salary towards savings.
- Minimise unplanned outings.
- Keep an eye out for discounts and promotions.
- Shop around before you buy something or go on a trip. Think about where and how you can save.
Melissa Javan: Financial freedom means more (and better) options
For 35-year-old Melissa Javan, an online and social writer, financial freedom means “having options that will help me make better decisions for my family and me”.
For her, this means having the finances to consider something she didn’t have access to previously, such as medical specialists, and better education for her children.
“I have set up an emergency savings account, which gives me peace of mind,” she says. “My next step is to work on a retirement plan.
“In terms of advice, I’d like to know how to build generational wealth, so my children will be taken care of.”
Melissa’s top tips for financial freedom are:
- Set financial goals, and work towards them.
- Grow your financial literacy. There’s plenty of free information in blogs, podcasts, digital books, and social media - just be sure to follow reputable commentators.
- Attend workshops focusing on making money and acquiring a “money mindset”.
- Set financial boundaries. This will help you to become more disciplined.
- Seek out a passive income, or start a side hustle where you can employ someone to work for you.
Alude Xuba: Financial freedom means access to finance if needed
Alude Xuba, a 29-year-old legal counsel, sees financial freedom as the ability to access, and manage, finance. “I should be able to access credit at any time, handle it diligently, and repay it,” he says.
That said, he sees debt as potentially restrictive, and notes that true financial freedom would entail not needing credit, or having to work for someone else.
Alude says he would like advice about budgeting, planning, and saving. “An experienced, certified financial adviser could talk me through the journey of saving and managing cash.”
Alude’s top tips for financial freedom are:
- Learn to be financially disciplined so you know where your money is going, and why.
- Save, as this will allow you to use your own money as you see fit.
- Undertake wealth planning, as this will help you to create financial freedom not just for yourself, but also for future generations.
- Only spend on luxuries if you have cash to spare, and the most essential items in your budget have been covered.
Tip: Saving and investing can put you on the path to financial independence. Find out how to set aside money for your future, today.