Planting the seeds of prosperity: Heritage Month tips for growing a financial legacy

The importance of leaving a financial legacy, even by those who may not consider themselves wealthy, should not be underestimated.

While the word ‘legacy’ can conjure up a picture of a vast fortune and dynastic riches, the reality is that many ‘ordinary’ people can educate themselves about money and set long-term goals to grow their assets.

“This Heritage Month is a timely reminder of the many benefits of growing a financial legacy,” says Shafeeka Anthony, Marketing Manager of JustMoney.co.za, a site that helps educate South Africans to make good money choices.

“Unexpected financial challenges can arise at any time. By creating a financial legacy, you can help ease your family’s burden during these difficult periods. Even a small savings account or life insurance policy can provide much-needed financial relief.”

A financial legacy opens doors for future generations. Whether it’s funding education, starting a small business, or helping with a first home buy, your legacy can empower your children to achieve their dreams.

Making a difference doesn’t have to be limited to your immediate family. You can also support causes and organisations that match your values. Charitable giving, even in small amounts, can make a big difference in others’ lives and have a lasting impact on your community.

Financial legacies also extend beyond money. They include the values and wisdom that people pass down to the next generation.

By sharing your own money lessons and experiences, you equip your loved ones with tools to make better decisions when navigating life’s challenges.

Tips for building a financial legacy

1. Start early: Building a financial legacy takes time. Start early by working with a financial adviser to develop a plan that aligns with your values and aspirations.
2. Set clear goals: Whether it’s saving for retirement, buying a home, or funding your child’s education, having clear objectives will guide your financial decisions.
3. Create a budget: Track your income and expenses. This will help you identify areas where you can save money and allocate funds towards your goals.
4. Live below your means: Avoid overspending, and maintain a lifestyle that’s below your income level. This leaves money for savings and investments.
5. Build an emergency fund: Set aside three to six months’ worth of living expenses in a readily accessible savings account. This will provide a safety net in case of unexpected financial setbacks.
6. Pay off debt: Prioritise paying off high-interest debt, such as credit-card balances.
7. Invest wisely: Consult a financial adviser to develop an investment strategy that aligns with your goals and risk tolerance.
8. Automate savings and investments: Set up automatic transfers to your savings and investment accounts. This ensures that you consistently save and invest, regardless of other financial temptations.
9. Maximise retirement savings: Take advantage of company retirement benefits, especially if your employer offers a matching contribution. Find out about tax benefits offered by SARS for retirement savings.
10. Educate yourself: Continuously teach yourself about money matters and investment options. Knowledge is a powerful tool. 
11. Avoid Impulse buys: Before making big purchases, give yourself time to think. Impulse buying can lead to regret and limit your ability to save and invest.

• Read a JustMoney article on how to cultivate a savings mindset.

12. Protect your assets: Consider insurance policies that protect you and your family, such as health and life insurance.
13. Estate planning: Develop a plan that outlines how your assets will be distributed after your passing. This can help minimise estate taxes and ensure your assets are managed according to your wishes.
14. Create a will: This document is essential for preventing family disputes and ensuring your legacy is executed as you wish.

• Find out why you need a well-drafted will.

15. Review and adjust: Periodically review your financial plan and adjust as needed. Life circumstances change, and your financial strategy should evolve, too.

• Educate your heirs: Prepare the next generation by teaching them about financial literacy, responsible investing, and the values that are important to your family.

“Building a financial legacy is a long-term commitment that requires discipline, patience, and the ability to adapt to changing circumstances,” says Anthony.

“It’s not just about accumulating wealth for oneself, it’s about creating a lasting gift that benefits future generations. It gives your loved ones a sense of security and stability, enabling them to follow their dreams and aspirations.”

JustMoney.co.za is a trusted voice within the personal finance sector. The JustMoney website offers articles, money management tools, and a wide range of financial products and services. Over 250,000 South Africans subscribe to the newsletter to stay informed and become financially savvy. Find the websitehere.