Sunday, May 24, 2015

6 Minutes with Ayanda Sepamla

I am a huge fan of financial fitness. I think I became interested in money when I decided to pursue a 'creative' career and everyone kept telling me that I was condemning myself to a life of poverty. I realised very early on that how much money you earn doesn't actually count - it's what you do with it that really matters.

My very dear friend Ayanda Sepamla is a financial whiz. She is a charted accountant, who works for one of the world's largest banking groups. In addition to her professional interests, she is passionate about personal finance and teaching young professionals and women to take control of their financial planning.

I decided to chat to her about a few money-related things, and realised pretty quickly that it was worth sharing excerpts of our conversation with the world.

What are the major mistakes young people make with their money?

Young people don't set financial goals. When you have a financial goal, you plan accordingly and ensure that you follow it through. Every young person should meet with a financial adviser to get a thorough understanding of the way forward with their finances. 

There are all kinds of numbers out there - what portion of one's income should be saved/invested?

One needs to evaluate the purpose (eg. a holiday, car deposit, emergency fund etc.) for which you are saving, and your capability (based on responsibilities and obligations to be met), because saving is a short term concept vs. investing which is long-term. You should aim to have at least 3 times your monthly salary in an emergency fund at any given time. On a monthly basis, use a portion of your salary, with reasonable time frames, to build towards that.

It feels as though there are new taxes, levies and price increase every other day, how can young professionals implement strategies to cope with these financial challenges?

The question is will they be affected? As young professionals, the sky is is the limit and your strategy in life and at work should be to perform at your optimal level so as to be adequately recognized and rewarded as a result. Hopefully your increase and bonus will help counter some of these taxes :)

Many of the young people I speak to say they can't find the money to save and invest... Where is this money hiding and what should they do when they find it?

The money really is not hiding, it's just that unfortunately, we are not all equally yoked when it comes to finances. That is the true reality. Some come out of varsity with student loan obligations etc., while others have had a head-start in life due to extensive financial support from their parents. Eventually "when the money is found" it's important to seek professional advice to help achieve your goals. Go to your bank and ask to meet with an in-house financial adviser.

With easy access to credit, it's so easy to get into debt. How does one begin to get out of it?

Meet with a financial adviser and ask them to perform a risk profile/assessment for you. This is indeed a sobering experience.

When is the right time to employ the advice of a financial adviser? Should one be in debt or have money to invest?

Essentially, today! Wherever you are, whatever difficulties you may have with your finances, an adviser is your guiding light on the way forward.

Ayanda loves talking money: she frequently contributes to Under5Foot and the Mbewu Movement. For the latest follow her on Twitter at @asepamla