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FIRE stands for Financial Independence, Retire Early – it’s a strategy focused on saving like a demon and investing as much as you can while you’re young, which will then allow you to retire far earlier than normal. Want to give up the nine-to-five in your 40s? It’s possible!

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The main thing to understand is what ‘financial independence’ means. In the context of FIRE, it’s when the income you get from your investments is sufficient to cover your living expenses, which means you don’t need to work. But just because you don’t need to, doesn’t mean you don’t have to. You could do something that you’ve always wanted to do which might not pay as much, or devote more time to hobbies, volunteer work or travel.  

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Proponents of FIRE typically aim to save and invest at least 50% of their income – far more than the conventional figure of 10-20%. 

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How to do it

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1. Increase your income. Advance your career, start a side business, invest in income-generating assets…

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2. Decrease your expenses. Budget hard! Cut all unnecessary expenses. 

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3. Save aggressively and invest wisely. As mentioned, you’ll need to save at least 50% of your income. Invest all your saved money to take advantage of compound interest.

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Is FIRE right for you?

To be fair, FIRE is not the right strategy for everyone. You have to think clearly about whether this approach aligns with your personal and financial goals. Are you comfortable with reducing your lifestyle expenses to increase your savings? Can you manage the risks associated with market volatility, which could affect your investment returns? Are you prepared to maintain a frugal lifestyle, even after achieving financial independence? 

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Remember, embracing frugality doesn't necessarily mean denying all life's pleasures. It’s about making conscious decisions about what truly brings you happiness – and discarding all the other unnecessary stuff. 

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If you decide that FIRE is for you, remember to reassess your financial goals regularly and adjust your strategies accordingly. There’s no one-size-fits-all solution. Speak to a qualified financial advisor if you need some guidance. 

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That said, even if you just explore a few of the basic principles of FIRE, you’ll be able to address some big financial issues faced by many South Africans, like taking on too much debt, not saving enough for the future, and spending recklessly.

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It’s a marathon, not a sprint

If you're considering going down the FIRE path, start by understanding your financial habits and use 22seven to create a budget that allows you to save as much as you can. It’s fine to start slowly – becoming financially independent might take years, if not decades. Be patient and continuously reassess your budget as your life, income and financial goals change. 

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Remember, you have the power to shape your financial future! Whichever path you choose, patience, discipline and a bit of thriftiness will never do you wrong.

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For such a ‘serious’ industry, investment people and economists have their fair share of silly references. There’s tulip mania (a famous market crash in Holland in the 1600s, driven by speculation over the price of tulip bulbs), a Santa Claus rally (when the market surges just before Christmas) and the Super Bowl indicator, where the performance of the stock market can supposedly be predicted based on the outcome of the Super Bowl. (Spoiler: it can’t.) And then there’s the Big Mac index, which might be the most famous of the lot. Invented by The Economist in 1986, it’s a tool that offers insights into currency valuations and purchasing power across countries.

‍What is the Big Mac index?

‍It’s all about comparing the price of a McDonald’s Big Mac in different countries to figure out if their currencies are over- or undervalued. A Big Mac is pretty much the same everywhere: if it’s more expensive in one country compared to another, it means that country's currency is stronger. If it's cheaper, that currency is weaker.

‍Why is it important?

‍The index helps us understand how currencies affect international trade. If a currency is undervalued, it means that country's stuff is cheaper to buy, making their exports more attractive. Countries with overvalued currencies, however, might be more likely to import goods if they are cheaper to import than to manufacture locally. The Big Mac index also gives us a peek into how well government policies are working. If a country's currency is overvalued according to the index, policymakers might consider measures to weaken the currency, such as reducing interest rates or implementing quantitative easing (basically printing money). An undervalued currency might prompt policymakers to take steps to strengthen the currency.

‍Which factors impact currency valuation?

‍Inflation rates, interest rates, trade policies, government interventions and other market forces are examples. The Big Mac index offers a simple, easy-to-understand snapshot of how all of these factors play out.

‍How can I use it?

‍Travel planning! If you're planning a trip to another country, the Big Mac index will give you a rough idea of the cost of living there, and how expensive things might be.

‍Where’s Mzanzi at?‍

In January 2023, according to the Big Mac index, the South African rand was 45.9% undervalued against the US dollar. (The rand is in the same WhatsApp group as the Azerbaijani manat and the Malaysian ringgit.) Check out the index at The Economist. Next time you pass by a McDonald's and see a Big Mac, remember that it's not just a tasty burger – it's a little hint that can help you make sense of the global economy!

When it comes to personal finance, maths is not just a subject from school days. Take the time to understand basic concepts and you’ll be able to budget more effectively, manage your debt better and secure your financial future. Sit down, class: here’s today’s lesson.

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Budgeting: The foundation of financial success

At the heart of every successful financial plan lies a well-crafted budget, which aligns with your income and expenses. You don’t even need a calculator for this one – let 22seven do the number crunching. Link all your accounts, track your spending and use the budget function to make sure you live within your means and have surplus cash to put towards savings and investments.

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Compound interest: The 8^th wonder of the world

Understanding compound interest is key to building wealth over time. It  allows you to earn a return on the initial amount invested and also on all the accumulated returns. Basically, given enough time, your savings will snowball. You can maximise the power of this mathematical magic if you allow your returns to be reinvested. In other words, keep your gains in the market for as long as you don’t need the money, and your investment should hopefully grow exponentially. (Big word: it means ‘a lot’.)

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Debt management: Make calculated choices

Debt is a reality for many South Africans. But if you understand the maths behind it, you can deal with it more efficiently. Start by assessing all your debts and their associated interest rates. Consider consolidating the high-interest debts or renegotiating interest rates where possible. By paying more than the minimum due each month, you can get rid of your debt faster and minimise future interest payments. (Use an online calculator to estimate how much quicker you’ll clear your debt if you increase your monthly repayments – google ‘debt calculator’, there are many available.) 

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Investing: Watch your money grow

Investing is not just for the wealthy – it's a powerful tool for everybody that allows you to grow your wealth over time. Don’t be intimidated; rather empower yourself by getting to grips with the fundamental concepts. Start by learning about the various investment building blocks like equities, bonds, property and cash. Next, research how to gain access to these by way of unit trust investments or exchange traded funds, for example. Consider diversifying your investments to minimise risk. The internet is your friend: make a cup of coffee and start reading. 

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Retirement: Secure your future 

Retirement might seem like a distant concept when you're in your 20s or 30s, but starting early can make a significant difference. And guess what? When you’re looking at long-term financial planning, maths comes into the equation yet again (excuse the pun). It’s quite a complicated business: you need to estimate how much money you’ll need in retirement, taking inflation into account, then set savings targets depending on how much you can contribute to a retirement fund each month, with a buffer in case things go wrong. You also need to assess your retirement plan once a year, at least, and adjust it according to how your life has changed or might change. 

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Get help from a pro

Remember that genius kid in the front row who made maths look easy? A good financial planner is like that. They’ll be able to look at your entire financial situation and help you understand all the concepts in this Slice. They’ll also help you implement them so that you can lay the groundwork for financial freedom. Put your thinking cap on – an A+ is within your reach! 

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Financial wellness goes beyond what’s in your bank account – it’s an all-round approach to saving, investing and actually enjoying your life. Imagine! You're on top of your monthly expenses, you’re prepared for emergencies, you’re on track to meet your financial goals… All the while enjoying the freedom to make choices that enhance your life.

You don’t have to be extremely frugal, amassing wealth at the expense of happiness. No! It's about creating a balanced approach that allows you to meet your current needs, save for unexpected expenses, invest for the future and enjoy the present.

Use 22seven to help you get there!

The 22seven app shows you all of your finances in one place. You can track your income, expenses and investments, and create a monthly budget to keep you on track. Here’s how to get started:

1. Link your accounts. Bank accounts, credit cards, loans, investments, retail accounts and even rewards. Seeing all your money stuff in one place simplifies budgeting.

2. Track your income and expenses. 22seven automatically categorises your transactions, giving you a real-time view of your income and expenses. This helps identify spending patterns and areas where you can save.

3. Make your budget. Now that you have a clear understanding of your income and expenses, you can create a budget that reflects your financial goals. Allocate funds for necessities, savings, investments and life's pleasures. Remember, each financial decision impacts others, so aim for a balanced approach.

4. Set financial goals. Whether it's building an emergency fund, saving for a dream holiday or investing for retirement, having clear objectives keeps you focused and motivated.

5. Monitor your spending. 22seven’s reporting features provide a visual representation of your income, expenses, net worth over time and other metrics. Keep an eye on your spending to ensure it aligns with your budget. Be flexible: if you overspend in one category, adjust your remaining budget for others to stay on track.

6. Review your progress regularly. The app’s tracking features allow you to monitor your progress towards your financial goals. Use it! It’s an easy way to stay motivated and you’ll quickly see if you need to make any changes to your budget or your goals. Your financial plans should be flexible and evolve as your life changes.

Final word

Financial wellness isn’t about depriving yourself. It's perfectly fine to budget for hobbies, entertainment, self-care and other activities that enhance your life, as long as these expenses are planned and you balance them with your saving and investing goals so that you have all your bases covered.

Remember, everyone’s journey to financial wellness is different. What works for one person might not work for another. If you’re unsure about your financial goals, or if you need help with budgeting, seek the assistance of a qualified financial planner. With the right tools, some patience and discipline, you’ll find the path towards financial wellness in no time!

We’ve all done it before… Going into the mall on the way home after a tough day for one little pick-me-up purchase, or impulse-buying online after an overwhelming week. What about going on an Instagram shopping binge after that same auntie asked again when you’re getting married?

But hey, this is a judgment-free zone focused on growth, so let’s not go into too many examples of emotional spending. Let’s rather look at strategies to help break the cycle.

Recognise your triggers

Start by knowing exactly which emotions, situations or events will trigger your emotional spending. These might include a boring Uber ride, lunch hour at work, anxiety-inducing activities or maybe even positive emotions like excitement or happiness.

Avoid temptation

If you know certain stores or websites trigger your emotional spending habits, try to avoid them as much as possible. Unsubscribe from email newsletters, unfollow social media accounts and find new hobbies or activities to occupy your time. Try exercising for the 20 minutes you usually spend scrolling, meditating or getting into a creative hobby. The better you know yourself, the easier this gets.

Make a budget

Are we saying a budget is the solution to most financial issues? Yes. Yes, we are. 22seven makes budgeting easy. Create one that takes your income and expenses into account and set aside a specific amount for discretionary spending. Stick to your budget as closely as possible to avoid overspending. Don’t deprive yourself of all your favourite expenses though, as this will lead to more impulse-buying in the future.

It’s okay to put away R500 to browse Takealot on a sucky Monday night if it suits your budget.

Wait before making purchases

This goes against the very nature of emotional spending. When you’re feeling down, you need a tall cappuccino and new boots immediately. But hang on: Next time you feel the urge to make an impulsive purchase, wait a day or two before buying. This way you’ll give yourself the necessary time and head space to evaluate whether that purchase is really necessary. (You can still have the cappuccino.)

Ask for help

Remember how we said in another Slice that talking about money is super important, and how it shouldn’t be taboo? If you feel like your emotional spending habits are impacting your life in a negative way, consider seeking support from a therapist or counsellor. A professional can help you work through the underlying emotional issues that might be contributing to your spending habits, and help you develop healthy coping strategies.

Remember, overcoming emotional spending is a process – it takes time and effort. Be patient with yourself and celebrate the small successes along the way!

Life is hectic and we’re faced with risks every day. Many of those risks are small, but some can be more serious. Here are five things that could happen to anybody, and how you can prepare so that they don’t impact your livelihood.

1. Losing your keys

If you’ve ever lost your house keys or car key, you’ll know what a mission it is to sort out. And it can be expensive, although household and motor insurance will usually come to the rescue. Mitigate the risk of losing your keys by putting a Bluetooth unit on your keychain (like an Apple AirTag or a Tile) so you can track your keys on your phone. As they say, prevention is better than cure. 

2. Stolen wallet

If you lose your wallet, you should immediately cancel all your bank cards. This means you need to actually know which cards are in your wallet! Make a note of them or take a photo of the inside of your wallet, and also note the cancellation numbers for all the various banks and other financial institutions. This will make it easy to cancel your cards quickly in an emergency. Don’t carry your ID card and your driver's license in the same wallet. It becomes very difficult to apply for a new driver’s licence without an ID.

3. Goodbye, phone 

Your phone holds your bank account and credit card details, e-mails, smart home apps and map apps with your favourite locations and more. Yet it only takes a second for someone to steal it. Take precautions! Use a passcode to lock your phone, or even better, fingerprint or face ID. For your transactional money apps, enable two-factor authentication. Put daily transaction limits on your bank accounts – this will limit the damage that can be done with unauthorised access. Enable ‘Find my device’ – this will allow you to locate your phone using a web browser and wipe the contents remotely. (Make sure to regularly backup your phone to a computer or the cloud.) If you run or cycle, consider taking a second phone for emergency calls and messages only, without any sensitive apps.

4. Injuring yourself

Whether you fall off your bike, slip on wet stairs or get hurt in a physical confrontation, a serious injury requires medical attention. Calling out a doctor or getting an ambulance to the hospital, along with any necessary treatment or surgery, comes at a huge cost. This is why medical aid (or medical insurance) is crucial: even the most basic plan will help to cover the costs if you’re admitted to hospital. Make sure you read your medical aid plan to see if the maximum amount of hospital cover is sufficient for you.   

5. Severe illness

It’s horrible to think about, but nobody is immune to dread diseases like cancer. Rather take steps now so that if the worst happens, you and your family are prepared. Check your medical aid policy to see which serious illnesses are covered, and to what limits. Upgrade your plan if necessary. Gap cover is another form of insurance that provides extra coverage in hospital when your medical aid cover runs out – again, check all the details. If you have a family that depends on you, it’s worth taking out a critical illness policy, which pays out a cash benefit if you get diagnosed. The money can be used to cover medical expenses, make enhancements to your home to accommodate your condition, or pay for assistance while you recover.

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A tax-free savings account (TFSA) is a financial product created by the South African government to encourage people to save. If you invest in a traditional investment product like a unit trust account, you pay tax on any growth within the investment. Not so with a TFSA: you get to keep all the earnings without giving any of it to SARS.

Here’s how it works, and how you can get the maximum benefit.

The rules

• There are annual and lifetime limits. You can contribute up to R36,000 per year to your TFSA, with a lifetime limit of R500,000* without being taxed on your contributions. Note that if you have more than one TFSA (which some people do), the contribution limits apply across all your accounts. In other words, if you have three TFSAs, you can’t contribute R36,000 to each one per year – you have to choose how to split the annual limit between them. If you don’t reach your R36,000 limit, the shortfall doesn’t roll over to the following year – your limit each year is always the maximum allowed contribution at the time.

*Remember that contribution limits can change. Speak to your financial advisor and keep up to date to get the most out of your TFSA's.

• You get taxed on contributions over the limit. If you contribute more than R36,000 in a year, you’ll pay 40% tax on the amount over the limit. It’s important to keep track of your contributions to make sure you don’t pay the hefty price of contributing too much.

• You can’t replace what you take out. If you take money out of your TFSA, you can’t replace it later – your limits don’t reset. For example, if you contribute R36,000 in one year and then withdraw R6,000, you can’t contribute R6,000 again in the same year. This also applies to your lifetime limit. If you’ve put in the max of R500,000 and you take out R10,000, you can’t top up the account to R500K again.

• You can transfer money between TFSAs. If you want to move your TFSA to a different service provider, you can do so without affecting your limits. Request a tax-free transfer from one account to the other, instead of withdrawing your funds.

Maximise the benefit

Even though you can ‘only’ put in R500,000 over your lifetime, this doesn’t mean your account stays at R500K forever. Remember, your investment will earn interest and grow with the market. The perk of a TFSA is that you don’t have to pay any tax on your earnings within the fund.

To maximise the growth of your TFSA, it’s best to contribute your entire allowance of R36,000 per year if possible, which equates to R3,000 per month. The longer your money sits in the account, the more it grows. Make it easy to contribute by setting up a debit order for the maximum amount you can afford each month. If this isn’t R36,000 by the end of the year, try to top it up further!

Being frugal is not some ridiculous new fad, like the latest diet – it’s a way of living where you try to save wherever possible, avoid unnecessary expenses and make the most of what you’ve got. Living frugally benefits your financial health (obvs), but it can also have a positive impact on your overall wellbeing and the environment. What’s not to love? 

Here are seven tips on how to become a thrifty budgeter:

1. Embrace DIY

Learn how to do things yourself and repurpose items that might otherwise go to waste. You’ll save money, reduce waste and unleash your creativity. Upcycling can turn old furniture, clothing or household items into something fresh and functional.

2. Cook at home

Meal planning and cooking at home are essential aspects of frugal living. By creating a weekly meal plan and shopping with a list, you’ll avoid impulse purchases and save money on groceries. Cooking from scratch allows you to have control over the ingredients and portion sizes, plus it’s healthier and more cost-effective than dining out or ordering Uber Eats.

3. Shop smarter

Look for sales and compare prices before making a purchase. Consider buying second-hand or thrifted items and don't be afraid to negotiate for a better deal. Online marketplaces can yield significant savings on everything from clothing to electronics and household items. (Make sure to shop safely.)

4. Kick debt into touch

Interest payments can consume a significant portion of your budget. Focus on eliminating or reducing your debt by creating a debt repayment plan; by paying more than the minimum amount due each month; and by avoiding new debt whenever possible. Use 22seven to track your repayment progress so that you stay on course.

5. Cut utility costs

Reducing utility costs is a simple way to save money. Turn off lights, unplug electronics and invest in energy-efficient appliances. Conserve water by fixing leaks, using low-flow fixtures and being mindful of your water usage.

6. Choose experiences over things

You still need to enjoy life, right? But rather prioritise memorable experiences like travel, concerts or special events instead of accumulating more stuff. You’ll be happier and you’ll have a greater appreciation for the things you already have.

7. Build an emergency fund

An emergency fund is like a financial safety net for those unexpected whoopsies in life. Having one will mean that you don’t need to take out a costly loan to cover unforeseen costs. Aim to save at least six months' worth of living expenses in a separate savings account. 

Use 22seven for frugal living!

Four features of the app to help you on your journey towards financial health.

• Track your expenses: Monitor your spending habits and identify areas where you can make cuts or spend better. 
• Customise your categories: Create spending categories that reflect your priorities. This will allow you to allocate funds effectively and ensure you're sticking to your (frugal) budget.

• Keep track of your savings: 22seven lets you link accounts from over 120 financial institutions (and counting), so it’s easy to automatically keep track of all your savings accounts in one place and hold yourself accountable to your savings goals.
• Never forget to pay a bill: 22seven will make sure you never miss a payment. You’ll avoid late-payment fees and maintain a healthy credit score.

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You all know how important it is to plan your monthly budget, but what about the bigger things? How do you get your finances in shape if you’re planning a wedding, having a baby or buying a house? Here are some tips.

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Tying the knot 

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Weddings can be expensive as heck and you don't want to start your married life in debt. 

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Start by setting a budget. Figure out how much you can afford to spend on the wedding and then stick to it. Remember, the most important thing is that you're getting married, not how much cash you’re blowing on a party for your friends.

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Get creative. There are plenty of ways to save money without looking like a cheapskate: 

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• Wedding venues are cheaper on weekdays and during the off season.
• Skip the guest favours – those little gifts on the table that everybody throws away anyway.
• Limit the guest list. Only include the people you and your fiancé speak to once a month at least.
• DIY the wedding décor.
• Ask for money as a gift if you know you’re not going to need three toasters and four silverware sets. 

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Now is also a good time to start thinking about your long-term financial goals as a couple. Set up a joint budget and start saving for things like a down payment on a house, future holidays, retirement…

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Let’s talk about the birds and the bees

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There are big financial considerations if you’re expecting a bundle of joy, or if you’re planning on having one in the next five years. Just like weddings, those diaper-wearing cuties are expensive! Start budgeting for costs like education now so you're not caught off guard later. If you want to save for your kids, opening a tax-free savings account could be a great option.

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Keep in mind that you or your partner might have to take time off work to care for the baby. Ask your company about parental leave, and any potential pay cuts, and include them in your budget. Do all of this beforehand, so that when the time comes you can focus on being the best parent you can be. 

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And don't forget about your own future! Make sure you keep contributing to your retirement accounts regularly.

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Bricks and mortar

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Thinking of buying a house? Use a mortgage calculator to determine how much you can borrow based on your income and expenses. Factor in costs like property taxes, insurance and maintenance. Use 22seven’s Future Budgeting tool to see how your month-to-month finances will change. 

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Don’t forget to plan for the hidden costs of owning a house: Repairs, renovations, and unexpected emergencies creep up on you. 

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Here are some of the top things to consider when buying a house. Remember to account for all the extra costs in addition to the price that you’re paying for your house. 

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S#*t happens

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Getting married and buying a house are wonderful events to plan for, but what about those less-wonderful events that can also impact your life? You need to start building an emergency fund. Aim to save enough money to cover at least three- to six months’ worth of living expenses. This will provide a financial cushion to help you through a tough event like a job loss or a medical emergency.

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Make sure you also have the right insurance policies to protect you and your family: health insurance, life insurance, disability insurance, home and car insurance… Chat to a financial advisor if you need guidance.

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Adulting is hard, but you can do it. Good luck!

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