Bertie Nel, Head of Financial Planning and Advice at Momentum

When South Africans celebrate their political freedom this Freedom Day, it’s an opportune time to also reflect on our personal freedoms – more specifically, our financial freedom.

According to Bertie Nel, Head of Financial Planning and Advice at Momentum, financial freedom is feeling secure and having control over your finances. When you can make choices based on your unique financial situation rather than feeling trapped, you are financially free.

The current economic realities, which includes rising interest rates and cost-of-living ias well as market fluctuations, have put many South Africans in a financial trap; they are struggling to achieve their financial goals and live within their means.

The most recent Momentum Unisa Household Financial Wellness Index reveals that a substantial number of South Africans are spending more than they can afford. Nearly 70% of financially distressed households facing financial difficulties struggle to meet their monthly expenses and pay their most essential bills. Nel says that even financially stable households are having trouble paying their bills and managing their debt.

“While achieving financial freedom may seem daunting in these times, it is important to note that it starts with arming ourselves with the right tools, actions and mindset. Setting Freedom Day as an annual milestone can help you to stay focused and motivated on your journey towards financial freedom,” he says.

Nel suggests taking the five steps below to set you on the road to financial freedom:

• Take stock of your financial circumstances: Start by assessing your current situation. Pay careful attention to income and expenses for a clear picture of where you stand financially and help you to identify areas for improvement.
• Set financial goals: Once you know where you stand, it’s time to set some goals. These could include paying off debt, saving for a down payment on a house, or investing for retirement. Make sure your goals are SMART: specific, measurable, achievable, realistic, and measurable.
• Create a budget: A budget is crucial for achieving financial freedom. It helps you track your expenses, avoid overspending, and save enough to meet your goals.
• Reduce debt: High debt levels significantly hinder financial freedom. Plan to pay off your debt quickly, starting with high-interest debt like credit card balances. Consider consolidating your debt or negotiating with creditors to reduce interest rates.
• Build an emergency fund: An emergency fund is a safety net for unexpected expenses like medical bills or car repairs. Aim to save three to six months’ expenses in an easily accessible savings account.

“Financial freedom can be achieved, but like any other freedom, it  requires discipline, planning, and persistence. Obtaining advice from an accredited financial adviser incredibly beneficial on your journey to financial freedom and success,” Nel concludes.

ENDS