Gugu Sidaki | 21 June 2024
Gugu Sidaki is an independent financial planner and co-founder of the financial planning and wealth management practice Wealth Creed. She holds the Certified Financial Planner accreditation and is an author and financial literacy enthusiast.
Money isn’t everything, but it definitely makes life so much easier. We are able to live in safer and more beautiful environments because of it. We are able to afford better schooling for our children. We are able to go on holidays … there are plenty of obvious benefits.
When you don’t have money, it is easy to feel jealous, victimised and even demotivated. It can tempt you to do risky things.
While you should strive to have enough money, having it won't miraculously solve all your problems and living a rich life is not just about having money to spend endlessly.
As the US billionaire entrepreneur Richard de Vos who founded Amway says: Money cannot buy peace of mind. It cannot heal ruptured relationships or build meaning into a life that has none.
While I agree, these words are spoken from a privileged position. When you are struggling financially, motivational words like these, particularly from a billionaire, are cold comfort.
However, there are a few things you can do that will be worth more than any amount of money. And doing them may even take you to a place where you will progress more easily to earning better and managing your money in a way that minimises your financial stress.
That is the way to a richer life rather than striving to earn high and spend without a care.
It has been proven time and again that knowing how to look after your money has a greater effect on your overall financial situation than how much you earn.
I have seen many people who have earned millions, but still struggled financially.
Budgeting is probably one of the most effective ways in which you can manage and improve your financial situation over time without necessarily increasing your salary.
Regardless of how much you earn, you have to understand that living within your means can save you from over-indebtedness, peer pressure spending and a lifetime of stress.
You also need to understand both the effects of interest on the debt you incur and the savings you make and how compounding interest can make the difference between you growing wealth and retiring successfully or not.
Knowing the implications inflation can have on your lifestyle can change how you spend, earn and invest – all of which ultimately affect your finances.
These things all seem like basic concepts, but only 40 percent of South Africans fully grasp them and even fewer people apply them practically to their lives.
It is quite difficult to fix your personal finances and maintain them at a good level while the rest of your life is in a shambles.
I see this often in my work as a financial adviser, and there is research to back this up. The California-based global advisory firm, the Gallup Institute, has identified five elements of wellbeing:
The institute’s research found that only seven percent of people around the world are thriving in all five elements. The implication is that if you are lacking in any one of these areas it has a negative impact on your overall wellbeing which ultimately takes its toll on your daily life.
Life is only well-lived if all the elements are maximised. This means you cannot focus only on your finances and hope to “live a rich life”.
The Gallup research also suggests that you can improve your life drastically if you focus on improving your relationships with your loved ones, strive for a career you love (irrespective of how well it pays), give back to your community (not necessarily financially) and strive for physical fitness, all while working to improve your finances.
While money is important and necessary for us to live well, it isn’t the sole reason for our well-being. In the absence of an abundance of money, there are other ways, that don’t necessarily have to cost money, to drastically improve your life.
