Being a member of the sandwich generation: those who need to make provision for the future whilst looking after parents and children experience tremendous financial strain.<\/li>\n<\/ul>\nHere, Hancox shares four hard knocks she\u2019s encountered and what she\u2019s learnt from them:<\/p>\n
\n1. No money to study.<\/strong><\/p>\nAt age 17, I matriculated and realised my parents hadn\u2019t been able to save up for my tertiary education. So, I looked for a job and that\u2019s how I ended up in insurance.<\/p>\n
At the time, I did what I needed to do. And I wouldn\u2019t change my life course. Though, now that I have my own child, I see it as a non-negotiable to put money away for her future \u2013 whether she wants to study, take a gap year, or explore a different journey altogether.<\/p>\n
Other lessons I\u2019ve learned:<\/p>\n
\n- \u00a0To talk to my child about money. In SA, this often seems like a taboo, but it\u2019s so important to instill sober money principles in young people – how to manage it, how to save and why you can\u2019t always buy things when you want them.<\/li>\n
- To get a handle on the crazy costs of raising kids! These expenses rack up fast, so I think it\u2019s critical to try to keep debt to a minimum and to stop trying to keep up with the Joneses. Ultimately, what matters is that my family is financially secure.<\/li>\n
- While it is important to save towards your child\u2019s education, it is important not to do so to the detriment of your retirement savings. You need to find a healthy balance between providing for your child\u2019s future and your retirement.<\/li>\n<\/ul>\n
\n2. I got divorced when I was 26 and my daughter was a year old.<\/strong><\/p>\nI wanted the divorce over and done with and I assumed we\u2019d always be friends, working together to raise our child. So I didn\u2019t make the best financial decisions at the time.<\/p>\n
In retrospect, I wish I\u2019d spoken to the attorney and a financial planner. I completely underestimated the less obvious costs involved. Like setting up a house or daycare \u2013 previously, my ex-spouse\u2019s mom had been looking after our child.<\/p>\n
My advice for others in this situation:<\/strong><\/p>\n\n- Don\u2019t do a \u2018quickie divorce\u2019. Speak to your attorney and financial planner. Make sure you negotiate a settlement that\u2019s fair, makes provision for your child\u2019s education, including their tertiary education, and ensures that maintenance increases annually, in line with inflation.<\/li>\n
- Make sure you have an insurance policy in place that covers maintenance commitments. Not having this could lead to difficult situations. For example, if your ex passes away or becomes disabled, maintenance will have a preferential claim on the estate, which means your ex-spouse\u2019s current partner might have to sell assets to free up liquidity in order to cover the maintenance claim.<\/li>\n
- Change your will. You have three months from date of your divorce to do this, otherwise the law sees it as your wish that your ex still inherits.<\/li>\n
- Change the beneficiaries on your life insurance policy.<\/li>\n
- Be cognisant of the other potential, unforeseen expenses of a divorce, like the attorney fee, transfer duties on properties, and potential changes to retirement benefits.<\/li>\n<\/ul>\n
\n3. Juggling a fluctuating income isn\u2019t easy.<\/strong><\/p>\nEarly on in my career, I was a broker consultant who earned predominantly commission. That meant my income constantly fluctuated between \u2018good and bad months\u2019. In the good months, it was really tempting to splash out and buy a car, for example. Then I\u2019d be hit by another bad month.<\/p>\n
The lessons I learnt:<\/strong><\/p>\n\n- To plan my budget based on the worst months.<\/li>\n
- Save during the good months and settle debts when you can.<\/li>\n
- Have an emergency fund with three-to-six months\u2019 worth of salaries. Keep contributing to this contingency fund to carry you through tighter financial times.<\/li>\n<\/ul>\n
\n4. My husband was retrenched.<\/strong><\/p>\nWe lived in Joburg before we got married. 7 years ago, my husband was offered a dealer principal position in Cape Town. I got a transfer to the Sanlam Cape Town office and we decided to move. We were both earning good money and on the verge of buying a new house when my husband was retrenched.<\/p>\n
The lessons?<\/strong><\/p>\n\n- Don\u2019t overextend yourself financially. In our case, the house would have been a huge burden, with only one income to pay off the bond.<\/li>\n
- Have that emergency fund in place! I can\u2019t stress this one enough.<\/li>\n
- Don\u2019t be tempted to live off the retrenchment package. I really advise chatting to a financial planner about your best options. Is there enough money to fund your own business venture, for example? My husband started a company that\u2019s only breaking even three years down-the-line. Can you afford that? Also, it\u2019s often a very bad idea to cash in your retirement savings. You\u2019ll be taxed on it and you\u2019ll find it difficult to replace the lost retirement savings over time due to various reasons, not least of all the effect of compound interest.<\/li>\n<\/ul>\n
\u201cWith everything that\u2019s happened, I think my biggest lesson has been to keep my financial planner close. Don\u2019t hide things because you don\u2019t think they\u2019re relevant. When things get difficult and the curveballs come your way, that\u2019s when you need to pick up the phone and call someone you trust.\u201d<\/p>\n
\nRead: This 29 year old South African quit her job to sail around the world<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"No-one is spared life\u2019s difficulties and challenges, and even the financially savvy occasionally learn lessons the hard way, like Lee Hancox CFP, head of channel & segment marketing at Sanlam Personal Finance.<\/p>\n","protected":false},"author":10,"featured_media":128287,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[26,13011],"class_list":["post-301276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline","tag-sanlam-personal-finance"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/301276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=301276"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/301276\/revisions"}],"predecessor-version":[{"id":301486,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/301276\/revisions\/301486"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/128287"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=301276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=301276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=301276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}