Category Life Insurance

Money mistakes to avoid from the summiteer of Mount Everest

29 July 2020 Momentum Multiply

The devastating impact the Covid-19 pandemic has on the economy, exacerbated by the lockdown, millions of South Africans are compelled to review their spending habits.

In May 2020, Statistics South Africa published a report where 25.8% of respondents reported a decreased income. One in ten of these respondents said it was too soon to tell what impact the lockdown would have on their income.

In these unpredictable and precarious times, careful financial planning is critical, as the likelihood of financial distress is higher than ever. Every rand counts, so we need to be cautious about how we spend our money and avoid making the most obvious mistakes.

This is according to Saray Khumalo, Head of e-Commerce and Partner Rewards at Multiply, and South Africa’s first black female to summit Mount Everest, who says that when life becomes especially hard, we become vulnerable to making mistakes – especially when it comes to our finances.

“I know from personal experience the importance of planning, not only to have a clear path for what we want to achieve but as a means to avoid making mistakes,” says Khumalo.

American economist, Herbert A. Simon once said, “the choices we make lead up to actual experiences. It is one thing to decide to climb a mountain. It is quite another to be on top of it.” As someone who has summited the world’s tallest mountain, Khumalo believes the same is true for our finances.

“We do not always act as planned. Mistakes happen but it is how we learn from that helps us push forward,” says Khumalo.

Khumalo shares how she tackled a few money mistakes to regain control of her finances:

• MISTAKE #1: Not reading contracts with care
“Signing surety for a business that I had no control over cost me dearly. It is crucial to read contracts carefully. Ensure that you take into consideration everything that can go right, and be aware of all possible risks at the time of committing.”

• MISTAKE #2: Ignoring the seemingly insignificant financial transactions
“Not checking my account closely for the insignificant deductions that add up every month proved to be another costly mistake. The small amounts accumulate, if not monitored and stopped. Watch your money closely and be vigilant.”

• MISTAKE #3: Relying solely on sponsors to fund personal goals
“Achieving your goals can be delayed if you place your bets solely on sponsorships. Saving a set amount of my income every month allowed me to achieve my unimaginable goals without fully relying on sponsors who did not necessarily believe in my dream at the time. A pre-determined savings amount linked to personal financial goals can make a huge difference.”

• MISTAKE #4: Failing to track spending from a young age
“It is important for me to track my spending save money for rainy days,” says Khumalo. “With rewards programme like Momentum Multiply, I am able to spend smartly from retailers who offer discounts and also use cashbacks I earn as savings for small to medium financial goals. If I started early in my life, I would have accumulated even more.”

“I know getting a hold of your finances can often feel insurmountable. It is important to go back to basics. Remember, the one thing you always need is to keep stepping, even if it is just an inch at a time. Finances can propel us or hold us back but it’s up to us to take calculated steps to avoid common mistakes where we can,” concludes Khumalo.

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