1 month ago
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This was one of the golden nuggets that emerged during a recent Money Cents webinar on smart money moves you can make. Panellist, Ncumisa Ndelu, founder of the Facebook group 1Family, 1Stockpile pointed out that many of the conversations around money are focused on the future, which cuts out the majority of South Africans because the conversation is either above their head or so far out of touch with the reality that they are struggling to make ends meet today, let alone think about the future.
“Our group has about 731,000 members. The most common issues are the ones that nobody talks about. Women, in particular, need to talk about money with their partners before they get married. You need to make sure that your values are aligned, because a misalignment easily leads to divorce,” she said.
Sharon Hamman, senior legal adviser at Momentum Distribution Services, agreed, saying it comes back to managing money personalities within a relationship.
“Often you may find that one partner is extremely committed, they want to save and won’t spend. Then the other partner just loves to live life, tomorrow is another day and the future will take care of itself. The problem is eventually they will clash. Then one starts spending in the dark because they fear the backlash, lies start and distrust sets in,” she said. Hamman recommends total honesty upfront. “The important thing to make the start is to actually have that conversation,” she said.
The other line of conversation Ndelu recommends is the one with your children.
“I wish we could talk to our children about money as much as we talk to our children about sex and getting pregnant. You don’t want your child’s first money conversation to be with a stranger, who possibly doesn’t share your values or gives them bad advice,” she points out. A good starting point here is to include your children in the household budgeting process. Ndelu says she even goes as far as teaching her children to “pitch” for something they want to be included in the budget.
“That teaches them how to prioritise their spending. If you want a new pair of sneakers, I’m not saying no, but you have to look at the household needs first. This teaches them that sometimes you have to wait for something that you want. You have to prioritise something that you need right now over something that can wait for a month,” she says.
Smart money moves that Ndelu and Hamman recommended included:
- Starting financial literacy with your children early on so they understand concepts such as life insurance, retirement annuities, the importance of emergency savings and how to manage their money.
- Introducing your kids to your financial planner. “Your children know who their family doctor is, they should also know who the financial planner is. They don’t need all the gory details, but they should know there is someone available who knows what’s going on and can hold their hand in the worst-case scenario,” Hamman said.
- Start saving with as little or as much as you can – just start. Ndelu says her money looks best when it’s in her bank account. “Once you start saving, it becomes fun. You literally want to see your money grow. It doesn’t matter how little you start with, as long as you make the start. People think that you need a lot of money to start saving, but just a few hundred or even R50 a month can be your starting point,” she says.
- The cost of groceries has been escalating rapidly in recent years. Ndelu practices and teaches the concept of stockpiling to create more room in your monthly budget.
It’s not about just buying wildly because something is on sale. “When you have available funds and something is marked down, you buy a little bit extra of that product. For example, say bath soap is marked down by 50%, I would buy enough to last three months, which means it can then be removed from my grocery list for the next three months,” she explains.
Items that can typically be stockpiled include household cleaning goods, canned food, cereal, rice, sugar and toilet rolls. “You continue stockpiling slowly until you eventually reach a point where you only need to buy perishables on a weekly basis,” Ndelu says.
However, one of the keys to stockpiling success is getting the whole family on board. Which means, for example, if you have purchased enough Weetbix on special to last three months, it shouldn’t be consumed in one month “because it’s there”. DM
