Your right to financial security should be celebrated in the month of human rights in March.
In a time when it looks as if most consumers will never find financial security as inflation increases and interest rates remain high, the good news is that you can take control and improve your financial security.
With Human Rights Day celebrated on Friday, it is also a time to reflect on the fundamental freedoms everyone is entitled to but what about the rights people deserve?
Sharon Hamman, senior legal adviser at Momentum, says one of these rights should be the right to financial literacy that will pave the way to financial security or the ability to not just survive but thrive.
A recent Financial Sector Conduct Authority (FSCA) survey, conducted in partnership with the Human Sciences Research Council (HSRC), found that only 51% of South Africans are financially literate by definition.
Hamman says without financial knowledge and the right foundations in place, many South African consumers remain vulnerable to economic hardships that can strip them of opportunities and stability. She believes financial security is not a privilege, but a right we should all be fighting for.
ALSO READ: How to build a legacy with generational wealth in 2025
Financial security does not happen by chance
“Economic realities are constantly shifting and financial security does not happen by chance. It requires planning, preparation and the right mindset. While we marked Human Rights Day, we should also champion for the right to financial empowerment, ensuring that everyone has access to basic financial education and the tools they need on their journey to success.
“You do not know what you do not know and therefore the first step is to know.”
She points out that financial illiteracy hampers financial stability and progress, adding to inequality, not just for the current generation but also for the generations that follow. “Financial illiteracy has a domino effect, limiting access to education, healthcare and basic needs.
“However, we can take control by advocating for financial literacy, taking responsibility for our own knowledge levels by reading and asking the right questions and making a conscious effort to upskill ourselves to allow us to make informed decisions that protect our financial future.”
ALSO READ: Getting ready for 2025: kickstart your financial goals
Hamman shares these 10 ways to assert your right to financial security and take charge of your personal finances, especially in economically uncertain times as the world is experiencing at the moment:
#1: Prioritise essential spending: Cut back on non-essential expenses to ensure financial flexibility. If your income is uncertain, adopt an essentials-only budget and renegotiate fixed costs like phone and internet contracts.
#2: Avoid lifestyle inflation: Now is not the time to take on unnecessary financial burdens like a bigger home or a new car. Keeping fixed costs low makes it easier to adapt to economic changes.
#3: Build and protect your emergency fund: Aim to save at least three to six months’ expenses in a high interest-bearing savings account. If you are self-employed or have an unpredictable income, consider saving even more.
#4: Reduce or settle high interest-bearing debt: Be smart about debt. Credit cards are great for short term debt as no interest is generally payable in the first 30 days, but thereafter it becomes very expensive. Consolidate your debts where possible, using interest efficient finance options. If interest rates drop, maintain your current repayment amounts to pay off debt faster.
#5: Stay invested and do not panic sell: Short-term market movements should not derail your long-term investments. Staying invested ensures you benefit from future recoveries and wealth growth.
#6: Diversify your investments: A well-diversified portfolio protects you against market volatility. If you are unsure how to adjust your investments, consult a financial adviser.
#7: Be mindful of tax implications: Understand how changing tax regulations, such as South Africa’s two-pot retirement system, affect your financial future before making investment or withdrawal decisions.
#8: Adjust your budget for inflation: Increasing prices affect everyone. Stay ahead by tracking your spending and making necessary budget adjustments to maintain stability.
#9: Get your will in order: A secure financial legacy includes protecting your loved ones. Having a valid, executable, up to date will with a reputable executor prevents legal complications and ensures your assets are distributed according to your wishes.
#10: Take advantage of financial advice: Financial security is not just about saving money but about making the right financial decisions. A licensed financial adviser can help you optimise your financial position, no matter what the future holds.
ALSO READ: Will South African youth achieve financial freedom? — Tomorrow’s leaders drowning in debt today
The freedom of financial security
Given the importance of money in our lives, true freedom includes the ability to control your financial future, Hamman says.
“Freedom is a fundamental right that our country is built on. Just like we have to work towards retaining that freedom every day, we also have to fight for our own financial freedom and it starts with educating ourselves.
“No matter how uncertain the world feels, staying informed, planning ahead and seeking expert advice can help secure the financial future we all deserve.”
