Managing personal finances can feel overwhelming, especially when you’re trying to balance present needs with future goals. Sheila-ann Robey, a CERTIFIED FINANCIAL PLANNER® and attorney, shares valuable insights to help you navigate the often complicated world of personal finance. With over a decade of experience in financial planning, Sheila-ann provides expert guidance on avoiding common pitfalls and developing sustainable financial habits. Whether you’re just starting your financial journey or looking to refine your approach, her advice will help you manage your money like a grown-up.
Common Financial Mistakes and How to Avoid Them
In her experience working with clients across South Africa, Sheila-ann identifies two major mistakes people make with their money: “The two most common mistakes South Africans make are that they do not budget, or know how to budget, and as a result, they rely on credit to fund their lifestyle.” These errors can lead to financial strain, debt, and a lack of control over personal finances.
To avoid these traps, Sheila-ann stresses the importance of proper budgeting. “Budgeting is 20% knowledge and 80% behavior. This is why it is so crucial to financial planning.” She emphasizes the need to be honest when creating a budget, as this allows individuals to recognize their spending habits and make meaningful adjustments.
Key Principles for Personal Finance
If you’re just starting your financial journey, Sheila-ann advises embracing two key principles: patience and consistency. “Patience and consistency are key in reshaping your financial habits and ultimately your future, very similarly to a weight loss and health journey,” she explains. Developing good financial habits takes time, but the long-term rewards are worth the effort.
Creating a solid financial plan may seem daunting, but Sheila-ann recommends seeking professional help. “To make use of a certified financial planner is advisable; they are not only qualified to advise holistically but also act as an accountable partner in a journey that is challenging for a first-time client.” A financial planner can help you understand your financial situation and guide you through the process of setting achievable goals.
Long-Term Financial Stability
Achieving long-term financial stability requires a strategic and sustainable approach. According to Sheila-ann, “Slow and steady wins the race, or as they say in Afrikaans, ‘bietjie, bietjie maak baie.’ Money does not secure a person’s financial stability as much as time does because of the effects of compound interest.” Consistency in saving and investing, rather than extreme measures, builds a more secure financial future.
Budgeting plays a critical role in financial stability, and Sheila-ann emphasizes that it should be done carefully: “I would advise that this exercise be done with a financial advisor, as it is so easy to forget that once-off garage coffee or even bank charges.” A realistic and reflective budget helps individuals become more aware of their spending and allows them to correct habits that may be draining their finances.
Essential Components of a Financial Plan
To safeguard your financial future, Sheila-ann highlights six key elements that every good financial plan should include:
- Budgeting
- Risk cover
- Retirement planning
- Goal-based investments
- Medical emergency planning
- Estate planning
Each of these components ensures that your finances are well-rounded, protecting you from unforeseen circumstances and helping you work toward long-term goals.
Prioritizing Financial Goals
When managing limited resources, prioritizing financial goals is essential. Sheila-ann advises aligning financial decisions with your values: “Prioritizing is key in any financial plan. My motto is ‘where your heart goes, your money follows.'” By focusing on what matters most to you, you can allocate your resources more effectively and work toward achieving your most important financial objectives.
Financial products like insurance, retirement accounts, and investments are also crucial in securing your financial future. Sheila-ann describes these products as “solutions to a problem,” noting that they are necessary components of any workable financial plan.
Balancing Saving and Enjoying Life
Many people struggle with finding the balance between saving for the future and enjoying their present financial situation. Sheila-ann believes that balance is crucial: “Balance is key in any financial plan as human beings must satiate their immediate needs, otherwise an underlying resentment grows in relation to their relationship with money.” It’s important to allocate resources toward things that bring you joy, while also setting aside funds for future needs.
Dealing with Financial Challenges
Unexpected financial challenges, such as job loss or medical emergencies, can derail even the best financial plans. Sheila-ann recommends having an emergency fund or retrenchment cover in place to prepare for such situations. However, for those who haven’t made provisions, she emphasizes the importance of working with a financial planner: “The role of the financial planner is key to keeping the client calm in these situations and to restructure the budget.”
When dealing with debt or poor credit, Sheila-ann advises patience and persistence: “Be gentle with yourself, accept the status quo as a first port of call, and then address consistently and patiently, step-by-step, the financial plan put in place for you by your financial planner.”
Financial Literacy and Cultivating Good Habits
Improving financial literacy can feel overwhelming, but Sheila-ann reassures that there are many resources available. “There are many podcasts, groups, and financial planners creating content, including through the Financial Planning Institute of South Africa. It is possible to educate oneself,” she says.
Sheila-ann advocates for cultivating two key habits: budgeting and spending audits. “Budget – tell your income what its job is, monthly, and stick to it. Spending audit – track your spending in your bank statement annually to see your habits compared to your budget and adjust accordingly.”
Staying Adaptable in an Ever-Changing Financial Landscape
The financial landscape is constantly evolving, and Sheila-ann encourages individuals to stay adaptable. “The financial landscape is ever-shifting—with the introduction of the two-pot retirement system, fluctuating interest rates, and the cost of living in this country, it is important to remain as adaptable as possible in yourself and in your financial plan.” Staying informed and seeking professional help when needed will empower you to maintain control over your financial future.
About the Expert
Names: Sheila-ann Robey
Qualifications: LLB (UP), LLM (Unisa), PGDipFP (UFS)
Occupation: CERTIFIED FINANCIAL PLANNER® & ATTORNEY
Sheila-ann Robey is a financial expert with a legal background. She is passionate about helping individuals manage their money, make informed financial decisions, and achieve long-term financial security.