Consulting an adviser makes all the difference

ADULTING is hard, particularly if you’ve launched into financial independence during economically tough times.

It’s hardly surprising that the 2018 Old Mutual Savings & Investment Monitor (OMSIM) reveals that 41 percent of the metro working South Africans surveyed could not make ends meet at least once in the past year.

Tapping into credit when your finances are stretched is very tempting, but very risky, according to Lizl Budhram, the head of Advice at Old Mutual Personal Finance.

“Many young professionals too easily – and too quickly – start relying on their overdraft facility or credit cards to cover their living costs. However, it’s a decision they are likely to regret.

“While credit may seem like the obvious solution, the truth is that loans and credit cards charge interest, which can accumulate at an alarming rate, if you’re not careful.”

Budhram said many young professionals who need to pay their own bills for the first time could find the experience overwhelming.

“This list is long. There’s rent, electricity, groceries, clothing, transport, medical aid, insurance and maybe student loan repayments.

“This is where financial advice can really make a difference. The internet has a lot of personal finance resources available at the click of a button. But if you’re serious about developing healthy financial habits and laying a good foundation, young professionals should consider consulting an adviser.”

She added: “Don’t wait until you’ve built up bad habits. You also don’t need to be a millionaire to afford financial advice – advisers are there to help and guide you regardless of your level of income.”

Any adviser worth their salt will start the process by focusing on your personal situation and financial goals. “Where do you want to be in a year or 10 years financially? Your goals are important and the more time you have to work towards them, the better. The most important outcome of a proper advice process is a clear financial plan backed by the right solutions to get you where you want to be in life.”

Budhram said finding a suitable adviser shouldn’t be a daunting task. “Start by asking friends or family for recommendations. If you need help with choosing the right financial adviser, you could request a call back at any time.”

Once you have made your choice, you can expect to go through the following process:

◆ Life stage. As a young professional, your individual situation is important. Your adviser will get to know you better to be able to offer advice customised for you.

◆ Financial goals. You'll also need to reflect on your dreams and financial goals. It's easy to fall into the trap of thinking only about your immediate needs. Taking a longer view and knowing your financial goals helps.

◆ A financial plan. Your adviser will design a customised financial plan for you to follow to make your dreams a reality. Consider your plan as a roadmap to peace of mind.

◆ Solutions. Your adviser will recommend specific solutions in the form of products, policies or investments to help get you where you want to be.

◆ Staying in touch. Remember, life changes and can take unexpected turns. Consider insurance to protect yourself against setbacks. | Staff Reporter