Addressing the ‘big four’

A training module addresses each of these areas, along with other core capabilities like investing, balancing the books, managing credit scores and saving for retirement. When it comes to addressing the ‘top four’, Vundla suggests:

1. Start with the needs and the wants: A need is something vital – like a home or groceries. A want is a nice-to-have that may improve one’s quality of life. It’s critical that people practise differentiating between the two. A good exercise to do is to go through an old bank statement and classify each item of expenditure. Was it necessary? Did it add long-term value to your life?
2. Now begin a budget: A budget is a plan for what to do with one’s money each month to reach set goals. First off, a person must know how much they earn. Then, it’s important to know how much they owe. Draft a list of monthly expenses – fixed (aka expenses that stay the same each month, like rent), and variable (expenses that fluctuate each month, like groceries). Tally these up and see if the expenses exceed income. Draft a plan to cut down expenses and maximise saving. Use a 50/30/20 Rule as a framework. 50% of income should go to needs, 30% to wants, and 20% for saving and debt repayments.
3. Short-term savings: This starts with a goal. A goal is a dream with a deadline. It’s important that people have the confidence to set clear milestones to work towards. Then it’s about creating a realistic roadmap to reach these. Short-term saving is a key part of that. There’s a critical misconception that one needs a lot of money to save. That’s simply not true. Small amounts, saved consistently in high interest-earning accounts, add up to bigger amounts. It’s about getting started as soon as possible.
4. Debt management: In December 2021, the South African Reserve Bank reported that nearly half of all South Africans could not repay their debts or lost income in the previous six months. Debt can feel like a dark hole that’s impossible to climb out of. The secret is starting small. Consistently paying off the smallest debts to free up funds to pay off the next smallest debt, and so on.

Vundla concludes, “WageWise aims to instil lasting financial resilience to give people the confidence to go after their goals, look after their families, and make their money work as hard as possible for them. After the last three years, we are seeing even starker inequalities embedded in our society, with COVID-19 having a dire impact on myriad people’s lives and livelihoods. Financial education is a way to give people a sense of agency; to take command over money matters and have the confidence to imagine a meaningful, fulfilled life.

“Sanlam is committed to our purpose: to empower generations of Africans to be financially confident, secure and prosperous. WageWise is a powerful means of doing this. We have seen the impact that financial literacy can have when it’s done in a new, dynamic format that reaches people in the right way.” Another way in which Sanlam is empowering people financially is through Sanlam Credit Solutions; a free, online tool that enables users to understand their credit score and get a free credit report.