Here are four tips from Financial Planner and Investment Specialist Adele Barnard to get you started.

Start saving for a rainy day

When it boils down to it, Adele Barnard reveals that most people are overwhelmed when it comes to starting. Barnard shares, “the best thing you can do for yourself and your family is to just start saving for that rainy day. Also, getting rid of debt is an investment too. People often overlook this and what an important part this can play in creating your financial safety net.

Avoid comparing yourself or your situation to others. Focus on your own financial safety net. I cannot stress this enough. You need to be consistent and disciplined when it comes to your finances. Often these two characteristics lack or are overlooked.”

Be insured for the unforeseen

The COVID-19 pandemic has revealed that thinking ahead long term can provide a financial buffer. Although we may not know what the future holds, having the breathing room financially to help you during such difficult times is vital. “Building a financial safety net is not a one size fits all solution, you need to personalise it to your circumstances and situation,” says Barnard.

Understanding the benefits of having a safety net

While working towards building your safety net may be hard, it is most appreciated on rainy days. “When you look at your bank statements or budget, determine what is necessary vs what is a luxury. Mandatory items will be rent/bond, food, insurances etc. Luxury items will possibly be Netflix and other streaming services etc.

If you are still anxious or feel cash strapped, look at alternatives, such as a side-hustle. You can only cut your expenses so much, then you need to look at other ways to increase income streams.

The best time to do something about your finances was yesterday, the second-best time is today. Do something today that your future self will thank you for,” adds Barnard.

Start researching financial products that will be suitable

Unless you have a financial background, choosing and picking financial products can be overwhelming. With so many offers on the market that have the promise to provide for you and your loved ones when you need it the most, having a financial advisor help you work your way through what will be suitable can ease the stress.

“Your biggest asset is not your home or your car or anything you own. Your biggest asset is your earning potential, i.e., your income. Read that again.  If you cannot work, you do not receive your income. A key financial product to provide a solution in this scenario is insurance,” advises Barnard. Insurance's sole purpose is to protect us against unforeseen situations. Have cover such as:

Life insurance - If you pass away, your family can continue living their life. It is also, helpful should you have debt, a bond, and need to leave a legacy for financial dependents.

Funeral cover pays a specified amount of money when you pass away. Your loved ones will be grieving, and you do not want them to struggle financially during a difficult time.

Disability cover is a lump-sum tax-free pay-out if you become disabled and are unable to resume work. The lump-sum payment can be used to cover medical expenses, home alterations, or just to make life easier living with your disability.

In addition to disability cover, you also get income protection. An income protection policy pays you a monthly income should you be unable to perform your job due to injury or disease, either temporarily or permanently. This income will be paid out to you tax-free every month until cease age.

Severe Illness

Severe illness cover is a type of insurance benefit that offers a lump-sum, tax-free payment should you be diagnosed with a severe illness like cancer, suffer a heart attack, or coronary artery bypass graft surgery. And remember, living with an illness can be awfully expensive.

Medical Aid

Medical aid is designed to protect your health – and your pocket. Medical aid is expensive, but even if you only opt for a hospital plan, take it. Medical aid provides peace of mind that you will be covered in the event of an emergency.

Gap Cover

Gap cover provides for the shortfall between what your medical aid pays, and the rate charged by medical specialists. Basically, gap cover ensures you are not left with enormous medical bills you can’t afford to pay.

Short-term insurance

Short-term insurance ensures your personal belongings are covered – think house, house contents, vehicles, building, cell phones, laptops and jewellery.

Adele Barnard (Financial Planner & Investment Specialist)

Please note that this financial advice may not be applicable to all situations. Therefore, we encourage you to an accredited financial advisor for tailored financial advice.