WHEN times are tough and money gets tight, we all look for ways to cut expenses.
And one of the first expenses to be cut is insurance.
Ray-ann Sedres, head of transformation at Santam, said: “Our mission is to place great weight on helping South Africans to make informed decisions that promote better long-term results in their lives.”
Sedres said that through live talks and radio interviews, Santam spoke about personal finance and budgeting, vehicle, building and home contents insurance with one of its underwriting partners Vum, the taxi insurers.
They came up with five topics about insurance and your budget.
You know what to do: We all know we should do it but few of us have the discipline to draw up and stick to a strict budget each month. Part of money management means realising that a budget will help you make the most of whatever you earn, however small the amount may seem. And budgeting isn’t just for people who earn salaries either – it’s just as important to plan if you’re a freelancer, work part-time or are unemployed.
Understand the difference: Lots of people confuse life insurance with short-term insurance. With short-term insurance, you’re not insuring yourself against a predictable risk but an unpredictable one.
You don’t know if you’ll be in a car accident tomorrow, if hail will destroy your roof or if your engagement ring will be stolen. So, by insuring yourself, you make sure you can return to the financial state you were in before the event.
Love your assets: Think about the things you own and the value they bring to your life.
Some things – like your jewellery and rings – may have emotional value but others, such as your laptop, tools or car, might be essential to your business too.
Consider whether you can afford to lose these assets if a flood or fire destroyed them. That should help you determine whether these properties are worth the cost of insurance.
Accidents happen: If something happened to your car, could you afford to replace it?
Some worrying statistics have been released recently. Texting while driving, for instance, makes young people between the ages of 18 to 24 years twice as likely to be involved in a vehicle crash as people aged 25 to 49 years.
Insurance keeps a good credit score safe: Credit can actually be a smart financial move, providing you’re using it responsibly to invest in an insured asset like a house.
