» Health costs often exceed benefits, with balance falling to the member to pay.
You have to plan to protect your savings and the way to do this is to use gap cover. If there is one thing that Covid lockdowns taught us, it is the need for financial resilience. As many of us found, the unexpected can occur and having a cushion of savings to fall back on is critical.
"South Africans just do not save enough, and it is therefore doubly important that your savings are not depleted unnecessarily by entirely predictable 'extra' costs, such as medical costs not covered by medical aid," says Michael Emery, marketing executive at Ambledown Financial Services.
He says South Africa's savings rate is 0.5%. Compare that to our peers, such as Brazil (16.9%), South Korea (13.7%) and India (10.8%).
You can use a common budgeting strategy made popular by Elizabeth Warren in the book All your worth: The ultimate lifetime money plan where you use the 50/30/20 rule and use 50% of your income to pay the bills, 30% on discretionary expenditure and 20% on savings.
"I doubt most South Africans come even close," says Rob Immelman, CEO at MEMP Group.
While pandemic lockdowns may be considered true blackswan events, Immelman says that unexpected medical expenses are one of the more common reasons people find themselves needing cash fast and yet few people have sufficient savings for these. "You need a plan," he emphasises.
This story is from the August 26, 2024 edition of The Citizen.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the August 26, 2024 edition of The Citizen.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
US blamed for expo row
Analysts warn exclusion could have dire consequences for SA down the line.
4900 visas for critical skills jobs
South Africa has a list of almost 150 jobs considered by the department of employment and labour (DEL) to be in short supply.
Nsfas to decentralise
Department welcomes move, plans to set up regional, satellite offices.
Lawsuits cost health billions
Investigations stop R3 billion in fraudulent claims, parliament hears.
City face Inter reunion
Manchester City are braced for their Champions League reunion with Inter Milan at the start of an expanded tournament that will be \"so tough\" for the 2023 winners.
League Cup no inconvenience
Manchester United manager Erik ten Hag insisted he still believed English football's League Cup remained a \"significant\" competition.
State of rates in Africa
Africa’s largest economies to make changes for first time in years.
RAF not about to 'implode'
»» Improvements not sustainable without legislative changes, says Letsoalo.
Can Superbalist grow?
Shein overtakes the SA retailer, while Bash is different kind of threat.
Crochet gets sex appeal
100% cotton yarn garments do not loose shape ina cold wash.