Musa vs Musk

At the time of penning this article, chaos has erupted in many streets of KwaZulu Natal and Gauteng as protesters and looters inundate our social media platforms with their violent actions. It’s not the most promising start to a third-quarter that we have experienced in recent times, but in this new crazy world, one has come to expect the unexpected.

Speaking of unexpected, I was pleasantly surprised, if not slightly irked, that my teenage children had more knowledge than I on the topic that I am about to share with you. I was waxing lyrical about the similarities of a 14th-century emperor and Elon Musk. Mansa Musa was the tenth emperor of the Mali Empire in the 1300s. Musa’s wealth came from trading in salt and the substantial gold deposits he had accumulated in his empire. All three of my kids had encountered Musa in their respective school curriculums and were not hugely impressed with my supposed superior knowledge of history.

Be that as it may, I searched for more information and read a fascinating article by Khulekani Magubana in fin24. He draws parallels with Mansa Musa and Elon Musk, our very own Pretoria-born American tech billionaire. Both incredibly rich individuals have made all kinds of unpredictable and impactful waves in a relatively new market. Historical recordings state that Musa embarked on his Hajj pilgrimage in 1324. During his journey, he travelled with a caravan of 60 000 people and gave away so much gold in the cities that passed on the way to Mecca that it caused the value of gold to fall. It did not rise for 12 years. Some 697 years later, Musk (worth more than $151 billion) has influenced the price of cryptocurrencies, Bitcoin in particular, with his comments on social media and subsequent buying or selling of the cryptocurrencies depending on their value at the time.

Efficient Group Economist, Dr Francois Stoffberg, said the comparison between Musk and Musa was apt in the sense that both were extremely wealthy individuals whose influence over a finite commodity had a profound impact on the economy they functioned in. Stoffberg says that it’s a fair parallel as gold wasn’t in such high circulation in the 1300s, and cryptocurrencies are not in high circulation today. Stoffberg did state that the one crucial difference was that unlike the decade it took the price of gold to recover in 1300’s Egypt, if one individual owns many coins and a dump of coins causes a fall in value, the system can self-correct quickly.

I am a passionate history scholar and a firm believer that if we only paid heed to the lessons of the past, we may be able to deal with the challenges of the present. If you enjoyed this economic tale of Musk and Musa with its historical twist, then I would encourage you to read the reviews and perhaps even obtain a copy of a book entitled “Our long walk to Economic Freedom-lessons from 100 000 years of human history” by Professor Johan Fourie.

Please take care during these turbulent, yet historic times.

Tax Filing Season for individuals opens on the 1st July, what do I need to prepare?

As Tax Filing Season approaches, Director of Chartered Tax, Charmaine Prout, shares some practical information on tax returns for individuals.

For many tax filing season is associated with feelings of apprehension and confusion. Most of us only do this once a year, and it can be quite bewildering and daunting to figure out exactly what we need to have on hand to submit our tax returns correctly. With SARS announcing that tax filing season for individuals will run from 1st July until 23rd November this year, it is time to start preparing the information and documents needed to submit our tax returns.

Remember that taxable income can come from many sources, and it is important to declare all income on your tax return.

We have listed some items below that you need to consider when preparing your documents.

  • If you earn income from an employer, pension fund or living annuity, you will need a copy of your IRP5 certificate, which will break down the income you have received and PAYE deducted from your income and paid over to SARS on your behalf. If you have not received this already, you can request it from your employer or your retirement fund administrator.
  • Are you claiming a travel allowance? If so, you will need a logbook detailing your business mileage for the year as well as your opening and closing mileage readings for the period 1st March 2020 to 28th February 2021. SARS has a template for this available on their website (2020-21-SARS-eLogbook.pdf), alternatively you can create one fairly easily using excel.
  • Are you earning rental income? If you are then you will need to prepare a schedule detailing all the income and expenses relating to the rental property. Be sure to have your proof of expenses easily accessible should SARS request them.
  • Do you have any bank accounts, both local and offshore that earn interest? If so, you will need an IT3(b) for each account detailing the amount of interest you earned during the year. The good news is that most banks allow you to download this using online banking.
  • If you have an investment such as a Unit Trust or Share Portfolio, you will likely have earned some taxable income from this. This income could be in the form of interest and dividends or in the form of a Capital Gain if you made any withdrawals from the investment. You will need a copy of both the IT3(b) and IT3(c ) certificates which detail this income.
  • Have you made use of a Tax-Free Savings Account? If so you will need a copy of the IT3(s) certificate from the provider detailing your contributions, withdrawals and profit or loss made on the investment.
  • Are you the main member of a medical aid? If so, you will need your medical aid tax certificate showing your contributions for the year, the number of members on the medical aid, and any expenses that were not paid by the medical aid. This can normally be requested off your medical aid’s online portal or using the self-help menu options if you prefer to request it telephonically. In addition to your medical aid tax certificate, if you had any qualifying medical expenses that you paid and did not submit to the medical aid, you will need a schedule of these, as well as the invoices and proof of payments should SARS requests them.
  • If you have made contributions towards a Retirement Annuity, you will need a copy of the contribution certificate from the provider.
  • Have you made any donations to registered Public Benefit Organizations (PBOs)? Should you have you will need to request a copy of the Section 18A receipt from the organisation to claim your tax deduction.
  • Take special care to mention to your tax consultant if you have sold any properties in the year under review.
  • Importantly, make sure that all your personal registered details are correct on e-filing and at SARS, especially your ID number.
  • If you are considering a work from home expense claim, there are specific requirements around this. Please refer to this previous article for more details.

Please remember that although most of this information should automatically pull through to your e-filing profile, you will need to have the hard copies available to submit to SARS if you are selected for a SARS verification.

As everyone’s tax return is unique and tax legislation is complex, this article is for information purposes only and is not to be construed as tax advice, nor does it consider your specific financial circumstances.

You can speak to a tax specialist from Chartered Tax for more guidance as professional specialists can add great value in helping you to keep your tax affairs up to date and in order.

Even in a low-interest environment, you should not lose sight of the value of savings

In this month’s edition, John Chikoki, Senior Retirement Fund Consultant, reminds us of the importance of saving.

Most South Africans across all ages and income groups are apprehensive about their finances and what the future holds. Even though a lot has been said about the Coronavirus pandemic’s impact on employment, there has been less focus on the value of investments, even in a low-interest atmosphere.

Apart from the health risks of Covid-19, the economic fallout and the national lockdown response has made many people feel particularly vulnerable. While these financial concerns among South Africans are understandable, getting back on track with their savings and investments is one concrete step they can, and should, take to help future-proof their finances.

With the prime interest rate at record lows of 7% and many people having either lost their jobs or watched their investments drop in value in 2020, it is not hard to see why many South Africans feel uncertain about the importance of saving. But a lower-interest-rate environment does not make it any less important to continue saving money now and in the future.

At the peak of the pandemic and lockdown in South Africa, stories of workers resigning to access their retirement savings due to financial hardship were rife. As a result, some banks noticed a definite spike in the number of clients accessing their savings. While this was undoubtedly necessary to help the individuals cope financially with the challenges of lockdown, it should be emphasised that it is now vital to forsake such thinking and get back on track with saving as quickly as possible and hopefully with more vigour and long-term focus.

The wisdom of this advice is evident when one considers the valuable buffer that the savings accounts provided for the people who had such accounts during the lockdown period. Moreover, the way the savings helped them to cope with weeks and months of decreased income offers an important lesson on the need to keep on saving, even when lower interest rates make the growth prospects a little less appealing.

A healthy savings balance provides a potentially lifesaving buffer against the impact of any future crises or emergencies. A good, fixed-term savings account still offers reasonable long-term rates to help you build up a cash balance that will stand you in good stead whether in a crisis or in retirement.

Arguably the most significant impact of Covid-19 on people’s lives was a result of the fear the virus created, which caused a form of financial paralysis for many. But now that Covid-19 health risks are beginning to be less intimidating due to the availability of vaccines and the fact that the economy is gradually rebounding, we all must overcome those fears and start to rebuild our lives and finances. One of the best ways to do that is by taking action and starting, or returning to, a disciplined saving and investment tradition.

Let’s not forget about retirement

The red and yellow hues have infiltrated the suburbs of Jozi, and one can hardly believe that it’s over a year since we commenced wearing masks and sanitising our hands with such zeal.

Autumn 2020 will forever remain in the memory as we trodded down the grass, circumnavigating our gardens as we attempted to stay running fit, hoping beyond hope that we would be permitted to run in our streets again. Any thoughts of self-pity were extinguished when we learnt of all the folks out there who were confined to small living spaces and lived alone.

With all the immediate pressing issues affecting our health and income, it is easy and understandable that one would lose focus on the critical end game, i.e. to retire with sufficient means to live a good life until we leave the planet.

This thought prompted some research into the history of retirement and delivered what we hope are some interesting facts. Retirement, or the practice of leaving one’s job or ceasing to work after reaching a certain age, has been around since the 18th century. Retirement as a government policy began to be adopted by countries during the late 19th century and the 20th century.

Before the 18th century, the average life expectancy of people was between 26 and 40 years. Due to this, only a small percentage of the population reached an age where physical impairments became obstacles to working. There had been a long practice beginning in the Roman empire to the modern nation-states of providing pension to those who had served in the military.

In the mid-1800s, certain United States municipal employees, including firefighters, police, and teachers, started receiving public pensions. In 1875 The American Express Co. created the first private pension plan in the US for the elderly and workers with disabilities. Early pension benefits were designed to pay out a relatively low percentage of the employee’s pay at retirement and were not intended to replace the employee’s total final income. By the 1920s, various American industries, from railroads to oil to banking, began offering pensions.

Retirement as a concept began to be widely adopted in the United States after the period of the Industrial Revolution, where numerous ageing factory workers started to show signs of ageing: slowing down assembly lines, taking excessive sick days and usurping the spots of more youthful, more profitable men with families to bolster. Also, older workers brought about unemployment among the youthful population by declining to resign. The Great Depression exacerbated things. Though some viewed retirement as an essential adjustment, many among the older populace resisted the idea of retirement.

In South Africa, the existence of retirement funds as we know them today is primarily due to the industrial revolution and the continuous competing need for high quality, skilled workers by large corporate companies. One way employers found to attract better quality workers was to provide some form of reward for long, loyal service to the company. And so, the pension fund was born. By the early 1920s, tax incentives were introduced by the government to inspire saving for old age, and due to this benefit, more and more companies started offering pension funds to their employees.

In 1956, the South African Government introduced what is generally considered the world’s first-ever Pension Funds Act that was specifically designed to regulate the business of pension funds. In the decades that followed, pension funds became more sophisticated with the growth of available investment vehicles and international investment channels.

According to the Mental Health Foundation, one in five present-day retirees experience depression. Those living alone because of bereavement or divorce are more at risk. Physical health problems can also make people more vulnerable to mental health issues. Recent studies have indicated that “retirement increases the chances of suffering from clinical depression by around 40 percent and having at least one diagnosed physical illness by 60 percent”. On the other hand, many workers have adopted scaling back on their jobs at around 55 or 60, or even changing careers, but still working for 15–20 more years.

As we rush into the next chapter of combatting this pandemic and the resultant economic challenges, we urge you to consider life after your career is over and how you can plan and provide for those future days: a retirement plan will be as necessary as an effective vaccine.

Does the South African Private Healthcare Sector Appeal to the consumer’s needs?

Medical Schemes

Medical aid scheme cover remains the number one insurance vehicle for accessing comprehensive private healthcare in South Africa. However, for many South Africans, medical aids are becoming increasingly unaffordable. This is reflected by the increasing number of existing scheme members downgrading their plans to more cost-effective options, and the scheme membership beneficiaries remaining stagnant for the last four years, with only 14.9% of the country’s population being insured.

The public sector currently provides healthcare for 85% of the population and accounts for approximately 48% of total healthcare spending. We cannot deny that NHI will play a major role in addressing this inequality. South Africans wait with bated breath for the full implementation of NHI and the positive changes it will bring to the healthcare industry.

Simphiwe Mofokeng, Senior Healthcare Consultant, looks at alternative options available to South Africans who wish to access private healthcare.

Covering Hospital Expenses

Health Insurance
Health Insurance policies are often perceived as a more affordable alternative to covering medical expenses when compared to Medical Schemes. However, the lower premium is representative of the limited cover provided. These policies may cover defined emergency hospitalisation stabilisation or illness, up to a specified rand value amount. This means one would not be covered for planned or non-emergency admissions through this type of policy. Health insurance cover should not be used in replacement of Medical Scheme cover.

Payment of a claim is usually made directly to the insured person and not the healthcare service provider. An example of this would be for accident treatment, a person may be insured for up to R150 000 per insured event with an excess of R600 being applicable. This type of policy is governed by the Long-Term or Short-Term Insurance Act; therefore the underwriting criteria and legislation differs from that of medical schemes.

Covering Day-to-Day Medical Expenses
Through Health Insurance policies, insured persons may claim for GP consultations, blood tests, x-rays, dental, optical, medication, etc. and the settlement of these claims may be made directly to the contracted healthcare service provider. Some health insurance policies cover chronic condition management; however, the conditions are specified and subject to a defined chronic medicine list. Oncology treatment is excluded.

Telemedicine
Recently we have witnessed a spike in the utilisation of telemedicine services – which provides healthcare services through virtual consultations. Modern technology has enabled doctors to consult patients by using telephonic and video conferencing tools. These consultations tend to be cheaper when compared to face-to-face consultations.

Prepaid Vouchers and Prepaid Card Systems
South Africa has entered the prepaid vouchers or prepaid medical cards system. Through these platforms, individuals will be able to purchase a voucher or load a rand value amount on the medical card which will enable them to consult and purchase medication through contracted healthcare service providers. However, some service providers such Discovery Health and Netcare Plus have been instructed by the Council of Medical Scheme to cease conducting the business of a medical scheme without the requisite approval from the CMS, Discovery has since appealed this decision by CMS, we await further updates in this regard.

If one cannot afford comprehensive medical cover, it is important when considering other forms of medical insurance to:

  • identify the risk they want to be insured against and ensure that the policy of choice meets that specific need
  • understand the exclusions, limits, co-payments applicable to that policy

It remains to be seen whether these new healthcare services will appeal to the needs of the uninsured South African population. While these products provide an entry access point to private healthcare, comprehensive cover remains limited to medical scheme cover.

1 March 2021 tax changes; should I be concerned?

The financial services industry and the media alike have been abuzz with news about the government’s announcement of tax changes to be implemented on 1 March 2021 (also referred to as T-day).

Raschin Naidoo, Head of Legal, Technical and Consulting Support, focuses on two of the most pertinent changes, annuitisation of provident funds and access to retirement funds upon emigration.

Annuitisation of provident funds

From 1 March 2021, new contributions to any retirement fund will be subject to the same tax dispensation, and these contributions, and growth on them, will be subject to the same annuitisation requirements when members retire (that is, that no more than one-third may be taken in cash and the rest must be taken in the form of a pension).

Vested rights

Vested rights have been protected, so members who have contributed to provident funds before 1 March 2021 will still be able to receive their benefits in respect of those contributions in the form of lump sums at retirement. Provident fund members over 55 years of age on that date will be able to receive lump sum benefits in respect of contributions made to those funds after 1 March 2021, but only if they remain in the same fund. If these members changed funds before retirement, the member’s contributions to the new fund will be subject to the new annuitisation rule. These measures have been designed to protect vested rights to lump-sum retirement fund benefits and ensure a gradual transition to the new annuitisation requirements. The first low-income retirees from provident funds will begin to be affected by the new rules from 2025 to 2030. The full transition to the new system is expected to be completed around 2060.

De minimis

A member will still be able to take the full amount in cash if the member’s value at retirement is below R247,500; this includes members over 55 who have transferred to new funds after T-day.

Am I allowed to take my full benefit when I resign?

A frequently asked question at member education workshops is whether a member will have access to his or her full benefit if the member left their employer fund. The annuitisation rule only affects members at retirement, not resignation and therefore, the short answer to the question asked is, ‘yes, you may!’ (subject to the applicable tax tables).

Access to retirements funds upon emigration

Currently, individuals are able to withdraw the full capital value from their retirement annuities, as well as the remaining balance in their pension/ provident preservation fund (i.e., the balance after a previous once-off withdrawal), upon the successful completion of their formal/financial emigration. With effect 1 March 2021, individuals must be tax non-resident for an uninterrupted period for three years or longer on or after 1 March 2021 before they can access their retirement benefit lump sums (RAs and preservation funds).

Are the changes an improvement?

The changes are largely positive, as they aim to encourage saving and protect members after their working lives. A uniform retirement system will allow all members to receive the same tax treatment of the money they contribute and how their benefits will be paid at retirement.

Concluding remarks

The annuitisation of provident funds are a culmination of the tax reform of the retirement industry, which were first announced by the Minister of Finance in his 2012 budget speech. The changes to the expatriate tax laws which started in March 2020 are largely aimed at non-compliant expatriates who have been operating under the SARS radar.

Covid-19 Vaccines - South Africa's race against time

Covid-19 Vaccines – South Africa’s race against time

Vaccines on the horizon

South Africa is set to receive its first batch of vaccines from the Serum Institute of India. The global demand for vaccines, coupled with the greater buying power of wealthier countries, amongst various other theories, has resulted in South Africa lagging behind in the race to vaccinate its population.

President Cyril Ramaphosa, writing in his weekly public newsletter, stated that through extensive, albeit ‘protracted’ negotiations with various manufactures, and initiatives with COVAX and AVATT, the country should have sufficient vaccines to contain the spread of the virus.

Deputy Director-General for the National Department of Health, Dr Anban Pillay, speaking in an interview with SABC, confirmed that South Africa at this point does not know what portion we will receive of the 150 million vaccines to be released in the first quarter distribution by COVAX. When South African receives its full tranche from COVAX, this will cover 10% of the population.

As the media swirls around the higher prices South Africa has paid for vaccines from the Serum Institute of India as compared to EU countries, Dr Pillay says the lower prices these countries are paying is a result of their earlier financial investment into the research and development of the vaccine. SA has paid the standard price as determined by the country’s economic status.

Experts are predicting a third wave as a result of the vaccine delay, and some vaccine developers are warning that the vaccines may need to be updated periodically to maintain its efficacy.

While South Africa faces a myriad of battles for the acquisition of the vaccine, perhaps its biggest battle is against time. Will South Africa receive enough vaccines to achieve herd immunity, and will we receive them in time?

Vaccine roll-out

The roll-out of the vaccine for South Africa will be phased, the basis of the strategy for the vaccine is:

Phase One

  • Front line health care workers (HCW). Target population: 1,250,000

Phase Two

  • Essential workers. Target population: 2,500,000
  • Persons in congregate settings. Target population: 1,100,000
  • Persons older than 60 years. Target population: 5,000,000
  • Persons older than18 years with co-morbidities. Target population: 8,000,000

Phase 3

  • Other persons older than 18 years. Target population: 22,500,000

Private Healthcare System

The Covid-19 vaccine has been included in the amended Prescribed Minimum Benefit regulations, as approved by Minister of Health, Dr Zweli Mkhize. This essentially means the vaccine will need to be funded by medical schemes.

According to CMS, there are still several issues that need further exploration:

  • A clear criterion of ‘prioritised populations’
  • Clinical guidelines and protocols
  • Guidelines on medical schemes liquidity management and scheme reserve requirements
  • The vaccine finding model and mechanism
  • Other persons older than 18 years. Target population: 22,500,000

It has been reiterated that the vaccine roll-out will be led nationally, there will be one procurement approach and the government will then work with provincial colleagues and the private sector for distribution.

The medical schemes will ultimately be led by government’s phased approached in the roll-out of the vaccines to its members.

Global Access

South Africa’s dual-health system has joined forces, resulting in the private sector pledging funding for millions of vaccines for uncovered South Africans, a step in the right direction as the world faces the moral dilemma of equitable access to vaccines.

Dr Tedros, Director-General of the World Health Organisation fittingly said, “No vaccines in history have been developed as rapidly as COVID-19 vaccines. The scientific community has set a new standard for vaccine development. Now the international community must set a new standard for access globally.”

Podcast

Kim Potgieter and Head of Healthcare for Chartered Employee Benefits, Paramesh Dayaram, discuss the rollout of the Covid-19 vaccination.

PLEASE NOTE: During the podcast, Paramesh Dayaram stated that there were only 1,5 million COVID cases recorded. He apologizes for this as it is actually 105 million cases recorded.

Goodbye 2020 – hello 2021!

As we reflect on 2020, for most of us, it will be a year we will never forget. All started well during the first quarter of the year; however, on the international front concerns were being expressed about the Coronavirus and its threat to the global economies. South Africans started to see the impact of the virus across Europe, through social media and our local television channels, blissfully unaware of the impact this was to have on all of us. Then in March, we heard about our first case in Hilton, and suddenly on the 26 March, we were confined to our homes as South Africa completely locked down. While the debate rages on as to whether this drastic step was the correct manner in which to tackle the crisis, we can look back on the significant impacts on our lives.

Working from home (WFH)

For years, people have argued the benefits of working from home (WFH), such as saving commuting time, increasing productivity, and creating a better work-life balance. Many companies were sceptical until Covid-19 forced offices to close indefinitely, ushering a new era of mass telecommuting. Many of us were uncomfortable, unprepared, and unmotivated by the concept, but after settling into the rhythm of working from home, many now prefer the ‘new normal’. Some companies have even decided to let their employees work remotely after the pandemic ends. For obvious reasons, WFH is neither practical nor possible for some industries, such as manufacturing, tourism, hospitality and travel – these industries suffered heavily under the lockdown measures declared by many countries and have only recently started to show some signs of recovery.

Some positives effects

While the pandemic put millions out of work and forced many to a adjust to a life of WFH, the lockdowns resulted in a positive effect on our climate, with fewer cars, buses, trains and planes in operation, which resulted in less pollution and better air quality. The reduction in commuter traffic also meant there were fewer accidents. Many used quarantine circumstances to improve their cooking skills and prepare healthier meals. In many cases, it resulted in stronger relationships with loved ones (some might say it was taxing!). It brought home the message that being hygienic is no longer just a good habit, but essential for our survival. The ‘new normal’ also challenges us to become more innovative to sustain our organisations, our clients and our employees.

What we missed in 2020

Going to school (some kids might not agree!); attending and participating in sports events (our beloved Two Oceans and Comrades ultramarathons were cancelled); the Olympic Games; going to the movies; concerts and even watching our favourite soapies or series, because production had to be halted. But most of all, because we are social beings, we missed socialising with family and friends.

Looking forward – we shall overcome

Pfizer, one of many pharmaceutical companies working on finding a vaccine against the virus, announced the results of their clinical trials, which showed that its vaccine was 90%-95% effective at preventing symptomatic Covid-19 in clinical trials. Other pharmaceutical companies, AstraZeneca, Moderna and Johnson & Johnson, are in the late stages of testing; this bodes well for the fight against Covid-19 as the entire world waits for an effective vaccine. Countries everywhere are still fighting this pandemic, but we will surely overcome this challenge – we are a race of survivors! Yes, the battle is hard and long, but the human spirit is resilient – we shall overcome!

Thanks to all our clients for the laughs and frustrations as we figured out Teams and Zoom meeting platforms together. While there were challenges, together we never wavered in our efforts to ensure all appropriate measures were taken to protect the well-being of each other during emotionally and financially stressful times.

From all of us at Chartered Employee benefits we would like to take this opportunity to wish you a relaxing festive season and a Happy New Year! We look forward to hopefully meeting you again in person in the new year, and until then, please be safe and well.

Kind Regards
Andrew

Financial Triggers

In this month of X-press, we explore financial triggers and how to manage them, so they do not derail your financial planning. It’s a great introduction that can spur introspection on the reason behind some of the behaviours that impact financial decisions, provided by our strategic partner, Interface Employee Financial Solutions.

What are financial triggers?

We all have financial or spending triggers, activated by deeply rooted emotions in us and often resulting in unwise financial decisions. Fortunately, we are not at the mercy of these triggers that may result in overspending, creating more debt and depleted savings, all of which jeopardise our financial success.

Since financial triggers can have a significant impact on your financial well-being, it is important to identify your triggers.

How to identify your financial triggers

Some of the most common emotions that lead to poor financial decisions include stress, excitement, boredom, sadness and peer pressure.

When stressed or sad, many people turn to ‘retail therapy’ splurging on a new outfit or buying luxuries they can’t afford to make them feel better. Others overspend on their family to ease the guilt of not spending enough time with them. Some are simply bored, just browsing through a shopping mall or online store – and end up with bags full of shopping they don’t need and can’t afford.

Maybe peer pressure or FOMO (Fear of Missing Out) is your trigger – making you spend money you don’t have on meals, drinks or entertainment, to keep up with friends. Or perhaps you feel celebratory on a birthday or after a promotion, or maybe, after a long hard week, you feel that you deserve a special treat.

Think about the times and the situations in which you made unplanned purchases, overspent, increased your debt or dipped into your savings. It will help you identify some of your most significant or most consistent financial triggers.

How to manage your financial triggers

When you know your triggers, you can manage them.

This means you can recognise an emotional state that triggers you, then take steps to change the emotion or your response to it by having a set of alternative positive responses.

Let’s say you often want to sit down and enjoy a meal without the cooking and cleaning after a long tiring day, and you readily give in to the temptation to eat out or get take-aways. To counter this trigger, you could indulge in other ways to relax; stock up on prepared dinners that are ready in minutes, and look out for specials so you can dine out for less on occasion.

Simple ways to avoid over-spending

  • Stay disciplined.
  • Avoid making financial decisions when in a ‘good mood’ or ‘bad mood.’
  • Identify spending patterns and the financial triggers linked to them.
  • Budgeting is a key factor to financial discipline, set yourself a limit, for example, if boredom is a trigger for you, you may want to set a limit for ‘fun money.’
  • Learn to say ‘No’ to yourself.

As we approach the festive season amid a strained economy, and in a period that has caused a multitude of emotions, lets practice making informed financial choices.

Warm regards,
Trevor

Don’t point at the mountain!

After a packed matric preliminary examination schedule, my eldest son requested a break from the stressful Grade 12 routine. He expressed a desire to take four of his school mates for a hike into the Drakensberg. En route to Giants Castle, our point of departure for the hike, one of the young men in the car stated that no one in our party should point at the mountain where we were attempting to ascend, as somebody had told him on a previous trip that such an action would result in poor weather or bad luck. I, of Irish descent, and thus a superstitious fellow, took this statement to heart.

Rockfall!

We commenced our hike at midday on Saturday and reached Bannerman Hut without much difficulty. This a basic hut where hikers can rest and sleepover before continuing their journey. After a restless night that was punctuated with baboon calls and the cry of an owl, we drank our coffee and began climbing out of the pass.

I was fourth in line and suddenly heard the shout “rockfall!!!”. My son, directly in front of me, dived to the left, and I was left facing this large rock that was hurtling at me at some speed. I was not agile enough to pick a side and was struck on the side of my knee and knocked off my feet and started rolling down the pass. Fortunately, my backpack caught on to some vegetation and arrested my fall. I quickly established that I could move my legs and that nothing was broken, except for my confidence. After taking a painkiller and redistributing some of the contents of my backpack to others in the party, I climbed out of the pass with a tender knee, and we descended reasonably quickly.

Spare Key?

We arrived at a deliciously cool pool and had a quick drink and “shower”. As we were loading our backpacks to set off, I noticed a tear in the bottom pocket of my pack, and my heart sank- the key to my H1 Hyundai bus had been in that pocket. It must have fallen out when I fell in the pass. There was a stony silence when I announced the news to the rest of the party. After some thought, the light bulb moment then struck- I had just purchased the vehicle the day before our journey and was fairly confident the spare key was in the cubby- hole.

I hiked with more vigour as there was now hope on the horizon and arrived at Giants Castle to find the matriculants lying exhausted outside the reception. There is no cell phone signal in that area, but the team at Giant Castle allowed us to use their landline to warn loved ones of our predicament and that we would arrive very late that evening. We summoned a locksmith who eventually retrieved the spare key, and we left Giants Castle at dusk.

The journey home

Life was good again, and the party was full of joy until we reached Van Reenen’s Pass to cross the provincial line back into the Free State. We could see the stationary lights stretching for miles, and the net effect was a 2-hour duration to travel 17km.To make matters worse, my son and I are fanatical Liverpool Football Club supporters, and we picked up on the Supersport app that Liverpool was on the receiving end of their worst defeat since 1963.

As we left Van Reenen’s and raced to that welcome coffee at Harrismith, the one young lad in the bus piped up “so who was it that pointed at the mountain?”

At last, we all arrived safely home

A carefully planned journey can still result in the unknown, much like most of life, a tale like mine reminds us how important appropriate insurance cover is. When I sit back and think of the potential alternate endings, I feel relieved that I have sufficient cover in place, if the worst-case scenarios had played out, my family and I were in a sound position.

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