“Financial freedom means the freedom from debt and financial stress”

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2014 marks 20 years of democracy in South Africa, which also coincided with the fifth national elections as a democratic country. While South Africans might enjoy democratic freedom, many have yet to achieve financial freedom.
 
“Financial freedom means the freedom from debt and financial stress,” says Laurence Hillman, MD of 1Life. “If you are able to reduce the debt you owe and begin to take control of your money and how you spend and save it, it can become a way to protect your family. It can offer you the option of retiring comfortably one day and can allow you to design the life you want to live.”
 
“Financial freedom isn’t about having large amounts of wealth and money, it is about having control of your life, 4Life. Control over your own time, which will allow you to make the choices you want to make, rather than being forced to accept a circumstance. It means you are able to acknowledge that your family is financially protected and their needs are taken care of.”

Click here to watch a video that provides more information on this initiative.
 
1Life provide Spice4Life with five steps to take into consideration to achieve true financial freedom 4Life.
 
Budget: Draw up a budget that lists your expenses and income and stick to it. If you are not sure how much you actually spend, check your bank statements or track your spending for a month. By learning to live within your means, you avoid reaching for your credit card at the end of the month and spiralling into debt. You can also ensure that you pay yourself first every month and save the money you and your family may need in future.
 
Financial planning
: Taking the time to put a financial plan in place can help you work out a detailed approach that takes into account your different savings goals. These include; short term savings goals of up to one year for an emergency fund and medium term saving goals of three to five years, for a deposit on a car, or a home. Unit trusts, retail bonds and ETFs are ideal savings vehicles for medium term goals.
 
Long term savings goals of between 10 to 40 years would include saving for your children’s education and your retirement. Remember that saving for retirement through your company’s provident or pension fund is unlikely to be sufficient. You should take advantage of the tax saving a retirement annuity affords you and put away as much as you can so that you don’t have to compromise on your standard of living when you want to retire.  
 
Debt: If you have built up a mountain of debt, you can still work your way out of it. Tackle your bills one step at a time and prioritise paying off the highest interest-bearing debt, such as your credit card and store cards.
 
If you are already in a situation where your debt is more than you can afford to repay, then it might be time to consider debt counselling. The National Credit Regulator website has a list of registered debt counsellors that you can use. A debt counsellor will negotiate a reduced repayment plan with your creditors that will ensure you still have money each month to meet your living expenses.
 
Insurance: Insurance protects your belongings and your family from the risk of accidents, theft, illness and even death. Short term insurance covers your household possessions, car, cellphones and laptop. Long term insurance protects you against the death, illness or disability of yourself or a family breadwinner.
 
Estate planning: Get peace of mind and have a valid Will drawn up by an attorney. This will ensure that your family is provided for after your death and that your assets are distributed as per your wishes. When you plan your estate, you should also take into account the taxes that your estate will be liable for, such as capital gains tax (CGT), estate duty and any income tax that was owed by you.
 
Remember, you only have 1Life, so start planning 4Life now by taking simple steps towards your financial future.
 
Do you want to improve your financial IQ and achieve financial freedom? Visit 1Life blog for great advice, tips and insights or visit www.truthaboutmoney.co.za for debt management and counselling, a financial education course and the setting up of your will and estate.

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