By Ronel Jooste
CA (SA) and Financial Coach
Contact Ronel: firstname.lastname@example.org
Money cannot buy happiness, time or health. Yes that is true and we all know that, but we can also not discard the important role money plays in our lives. Taking care of our financial wellbeing is as important as our physical and emotional wellbeing.
Considering Maslow’s hierarchy of needs we need money to fulfil our basic needs for food, water, a house to live in and to provide for our family. We need money to take better care of our health and to pay for proper education. In short we need money to pay the monthly bills.
When finances are tight it can put unnecessary pressure on our relationships and increase our stress levels, which again can have a negative impact on our health. Studies have shown that theft, crime, illiteracy, poor health, broken marriages, children with behavioural problems and poor performance at work can all be a result of personal financial difficulties.
Apart from fulfilling our basic needs, money also plays a vital role in creating the lifestyle we dream of. We need money for that home cinema; Mediterranean cruise; new house; new car… To create the lifestyle we dream of, we need to have a proper savings plan; make good investment choices and build our wealth portfolio. Becoming debt free as early as possible is crucial in creating wealth and to create that dream lifestyle.
Sometimes we tend to plan properly for the shorter term but we forget to plan for our retirement and for that event we all rather ignore – death. Yes we need money to retire comfortably and it is a known fact that in South Africa and world-wide a huge percentage of the population cannot retire comfortably. Making provision for our retirement through pension funds and retirement annuities, is an important part of our financial plan that needs to be revised and adjusted on an annual basis.
We might not need money once we are dead, but our loved ones definitely do. Many people leave their loved ones in severe financial distress when they die. We should ensure we have proper funeral cover and life cover in place; and that our wills are up to date especially when big life events occur for example getting married or divorced or having children.
We should teach our children the importance of money at a young age. Children who understand basic financial concepts like saving, investing and financial independence will make better financial decisions when they are grown-up. Start building our wealth at a young age will become extremely powerful as we grow older. The time value of money can never be over-emphasised.
Don’t become addicted to money and don’t ever make the mistake to believe that money will buy you happiness. However don’t underestimate the important role money plays in our daily lives either. Having a proper financial plan and goals is as important as having an exercise plan and following a well-balanced diet. Your financial wellbeing directly contributes to your overall wellbeing. Take good care of it.