What is financial literacy?

Financial literacy is the understanding and application of various financial skills, including personal financial management, budgeting, and investing. It involves knowing how to effectively manage money, make informed financial decisions, comprehend financial documents and use financial resources to achieve long-term financial stability and security.

What is financial planning?

Financial planning is the strategic process of setting financial goals and creating a roadmap to achieve them. Financial planning focuses on actionable steps to reach your financial objectives. A financial adviser may assist in financial planning by providing guidance, expertise and personalised advice to help someone achieve their financial goals.

How do I get started on my financial wellness journey?

Five tips to get started: 1. Start by tracking your expenses | Understanding where your money goes is the first step towards financial wellness. Use apps or spreadsheets to record and categorise your expenses 2. Create a budget | Set spending limits for different categories and stick to them. Give priority to essential expenses and allocate a portion of your income towards savings and debt repayment 3. Build an emergency fund | Aim to save three- to-six months' worth of living expenses in case of unexpected events (eg, job loss or medical emergencies) 4. Pay off high-interest debt | Prioritise paying off debts with high-interest rates to save money on interest payments and improve your financial standing and credit score/rating 5. Invest in your future | Consider long-term investments like retirement annuities or other investment vehicles that align with your goals. Start early to benefit from compound interest.

How to create a financial plan

To create a financial wellness plan, start by setting clear and realistic goals. Whether it's paying off debt, saving for a specific purchase, or building an emergency fund, having well-defined objectives will help guide your financial decisions. Next, develop a budget that tracks your income and expenses, allowing you to identify areas where you can cut back or save more. Consider automating your savings and setting up an emergency fund to provide a safety net in case of unexpected expenses. Finally, regularly review and adjust your plan as your circumstances change.

Financial wellness

What does financial wellness mean to you?

In our fast-paced world, financial wellness has become an important aspect of our lives. When you’re in control of your financial situation, you have a greater sense of security and are better able to meet your financial goals.

What financial wellness means to you is personal. It depends on the lifestyle you want, the goals you want to achieve and the future you envision for you and your family.

Achieving financial wellness starts with understanding your personal financial situation. By taking a close look at your income, expenses and financial goals, you can identify areas for improvement and develop a plan that aligns with your values and aspirations.

Remember, financial wellness is a journey, and it’s essential to focus on your own needs and priorities along the way.

Listen to our podcast

Everything Counts | Ep 1: What does financial wellness mean to you?

In this episode, we delve into the fundamentals of financial wellness. Host Motheo Khoaripe chats to leading financial consumer journalist Maya Fisher-French and seasoned Investec financial advisor Kgomotso Motlaung. They break down the basics of managing money, debunk the myth that you need a finance degree to be financially savvy, and share practical steps to take control of your financial future.

Listen to our full series

Financial wellness is not a one-time fix.

It requires ongoing attention and adjustments. Regularly monitor your progress towards your goals and make necessary changes to stay on track. Stay informed about financial trends, investment opportunities and new methods to save money. Seek professional advice when needed, such as from a financial adviser, to ensure you are making informed decisions.

Remember, financial wellness is about continuous learning and adapting to new life stages and career development.

Financial wellness is a position of financial stability where you can meet current and future expenses, manage debt, save for goals, and handle emergencies. It’s not just the absence of financial stress or worry, but also about a sense of financial security and freedom to make choices that lead to a fulfilling life.

How to improve your financial wellness

1. Tracking your money

Track your income and expenses. This you can do by looking through your bank statements.

2. Budgeting

Setting strict spending limits so you can avoid overspending and identify areas where money can be saved

3. Saving

Developing a habit of saving where you consistently set money aside for various purposes, including short-term needs, long-term goals and unexpected expenses

4. Managing debt

Keeping debt levels manageable, paying off debts efficiently, and avoiding high-interest ('expensive') debt that can lead to financial strain.

5. Financial security

Having sufficient insurance coverage (health, life, disability etc) and retirement savings to protect against financial risks and ensure future stability

6. Investing

Understanding investment options and strategies to grow wealth over time and knowing how to diversify investments to manage risk.

Everything Counts series banner - Motheo Khoaripe

Get more Investec insights into achieving financial wellness

{[post._title]}

{[$index + 1]}

Must knows

Frequently asked questions

What is financial literacy?

What is financial literacy?

Financial literacy is the understanding and application of various financial skills, including personal financial management, budgeting, and investing. It involves knowing how to effectively manage money, make informed financial decisions, comprehend financial documents and use financial resources to achieve long-term financial stability and security.
What is financial planning?

What is financial planning?

Financial planning is the strategic process of setting financial goals and creating a roadmap to achieve them. Financial planning focuses on actionable steps to reach your financial objectives. A financial adviser may assist in financial planning by providing guidance, expertise and personalised advice to help someone achieve their financial goals.
How do I get started on my financial wellness journey?

How do I get started on my financial wellness journey?

Five tips to get started:

1. Start by tracking your expenses | Understanding where your money goes is the first step towards financial wellness. Use apps or spreadsheets to record and categorise your expenses

2. Create a budget | Set spending limits for different categories and stick to them. Give priority to essential expenses and allocate a portion of your income towards savings and debt repayment

3. Build an emergency fund | Aim to save three- to-six months' worth of living expenses in case of unexpected events (eg, job loss or medical emergencies)

4. Pay off high-interest debt | Prioritise paying off debts with high-interest rates to save money on interest payments and improve your financial standing and credit score/rating

5. Invest in your future | Consider long-term investments like retirement annuities or other investment vehicles that align with your goals. Start early to benefit from compound interest.
How to create a financial plan

How to create a financial plan

To create a financial wellness plan, start by setting clear and realistic goals. Whether it's paying off debt, saving for a specific purchase, or building an emergency fund, having well-defined objectives will help guide your financial decisions.

Next, develop a budget that tracks your income and expenses, allowing you to identify areas where you can cut back or save more. Consider automating your savings and setting up an emergency fund to provide a safety net in case of unexpected expenses. Finally, regularly review and adjust your plan as your circumstances change.