How to afford those red-bottom shoes by making smart money moves with multiple income streams
Cardi B’s was the breakout story of 2017. She stretched her 15 minutes of fame as a social media influencer to become a rapper and reality TV phenomenon. Her hit, Bodak Yellow, struck a chord with millions because of her bold take on money, her in-your-face confidence and, well, the beat. Her story has also inspired many women working to build success for themselves and their families.
Lizl Budhram, Head of Advice at Old Mutual Personal Finance, says that although we can’t all catapult to stardom and wealth like Cardi B, she is indeed inspiring women with her determination to explore and manage multiple income streams to support herself and her family.
Earning money from various sources is definitely a growing trend
The latest findings from Old Mutual’s Savings & Investment monitor show that already 43% of working metro South Africans have a side job over and above their formal employment, up from 37% in 2017. This reflects a global phenomenon that led to the term ‘slasher’ being coined, referring to the slash between a woman’s job titles: for example, editor – slash – nail technician.
Budhram adds that generating money this way presents unique challenges and risks that need to be carefully managed to ensure long-term financial health.
Budhram offers women who are slashers (earning multiple incomes) five smart money moves:
Make a plan
As a slasher who gets lump sums here and there on top of your monthly income, you need a solid financial plan to make sure you are growing wealth from these extra earnings. Speak to a financial adviser to help you put a plan together and check in with them whenever there are any changes in your earnings, expenses, priorities or goals.
Build a security nest for rainy days
Cardi says she “hit the store, I can get ’em both, I don’t wanna choose”, but until you’re earning millions, you probably should choose, and prioritise financial security and savings. Don’t make the mistake, made by many, of rocketing to success and spending like there’s no tomorrow. If you spend more than you earn, you’re going to run into trouble, no matter how much you earn. Make sure you are saving enough for rainy days.
Save for retirement
Earning income over and above your regular salary means you can invest more in your retirement savings. Relying solely on compulsory contributions to an employer-sponsored retirement fund does not guarantee that you will be able to retire comfortably.
If your only source of income is through freelance jobs – and you’re not a member of an employer-sponsored retirement fund – the need to invest for retirement is even greater. Tax-free savings accounts (TFSAs) and retirement annuities can help you grow your money while benefiting from tax incentives.
Invest back into your work
Just a year after her debut single, Cardi B is still making waves in the music industry, thanks to her ongoing investment of hard work and capital in her career. Remember to grow your product or service through regular and sustainable contributions of capital. You also need to ensure that you are covered in case of any unexpected events.
Enjoy your income
It is important to reward yourself, and enjoy the proceeds of your hard work. Buy the red-bottom shoes if your financial adviser agrees that you can afford them, and if you must, but don’t underestimate life’s simple pleasures, like treating your family or close friends to a delicious dinner or short holiday.