National Financial Freedom Day: 3 tools that can help you attain financial freedom and build generational wealth

Brina Biggs, Senior Manager at 1Life Insurance

1 July marks National Financial Freedom Day – a day set to celebrate the freedom of being able to afford the kind of life one desires without having to worry about making ends meet. It refers to being free from debt, having passive income sources, and having a safety net for saving.

Unfortunately, for many South Africans, this is not a reflection of their current financial situation. In fact, our third annual Generational Wealth Survey indicated that many South Africans are living hand-to-mouth – with over 57% of respondents indicating that they are just surviving, and often find themselves feeling anxious about whether or not they will be able to meet their monthly expenses. 

In a different study – our 2024 Generational Wealth Youth Survey – which focused on age group between 18 – 35, the findings were just as concerning. The report revealed that of the few employed youth in our country, over 50% of them do not know how to build a financially stable future. The study further revealed that less than 30% of South African youth have a solid monthly budget in place.

The reality is that it takes good financial management skills to be able to use money to cover  day-to-day expenses, let alone clearing one’s debt and having the discipline to put some money aside as savings, or for life’s incidentals. In the absence of these skills, many consumers have found themselves making bad financial decisions that have landed them deep in debt. This does not have to be your reality too. 

Despite the current economic challenges and the steep cost of living, financial freedom is attainable. 

Here are some of the tools that can help you attain financial freedom and build generational wealth:

1. Financial literacy
   Learning good money management skills is essential. Not only will it help you get out of debt, but it will also empower you with the necessary skills to take control of your finances and make informed financial decisions.
   
   Consider taking a short course, such as the 1Life Truth About Money short courses. These courses cover a range of topics, such as the basic principles of successful money management, tried and tested methods of paying off debt, training on how you can make your money last, as well as how you can be the first to build generational wealth in your family. Furthermore, the courses include and interactive course for your kids, where they can also learn good money management skills – helping you ensure that these skills are being preserved and passed on to the next generation in your family.
   
   
2. Life insurance
   People seldom think of insurance when they think of financial freedom. In fact only 40% of the repsondents to our 2024 Generational Wealth Youth Survey indicated that having insurance policies (such as Life cover, retirement annuity) equates to wealth. This is indicative of the gap in understanding how having the right insurance provides the neccessary financial saftey net, amid life’s unceratainties.
   
   For example, you can take out Life insurance to cover specific debts, such as when your life policy is ceded to a bank with a home loan. In addition to paying off your life insurance claim, the proceeds can also be used to pay off any other debts that you leave behind, such as student loans. Unlike other forms of insurance, life insurance pays its benefits directly to the beneficiary, meaning that it does not form part of the estate and is tax-free.
   
   This type of planning can be a huge help for your loved ones – setting them up for a bright financial future, even in your absence.
   
   
3. Partner with a financial advisor
   The role of a financial advisor is simple: based on their market research, they provide financial advice aligned with your financial goals, helping you protect your assets and estate. With a customer-focused approach like the one we use at 1Life Insurance, this means that the advice given is always tailored to your unique financial situation, making it practical and attainable.
   
   The day-to-day management of your money has a direct impact on your long-term goals, so a financial advisor can also assist with your monthly budget. By identifying where expenses can be cut and income-generating opportunities, advisors can offer an objective, independent view of a budget.

Financial freedom is attainable. The key is to prioritise getting a financial education, and speaking to a financial advisor or insurer, to determine the best way to financially navigate these difficult times and make your money work best for you!