Achieving financial wellbeing is more than just managing your day-to-day finances to get by.
A new year gives you the perfect opportunity to start fresh and form habits that can improve your overall wellbeing. Achieving financial wellbeing is more than just managing your day-to-day finances to get by. It is about building resilience, setting and reaching long-term money goals, and enjoying the freedom that comes with added financial security.
The path to this security is shaped more by consistent financial behaviours than by income alone. Building on this principle, Discovery Bank has identified six key behaviours that, when adopted, promote lasting financial wellbeing.
The six behaviours that secure financial wellbeing include spending less than you earn, having sufficient savings or emergency funds, paying off property, investing for the long term, having essential insurance, and planning your finances.
Discovery Bank combines behavioural science, such as nudges, gamified rewards, and data-driven insights, with its shared-value banking to help you manage money well. For example, Vitality Money links rewards to your financial progress, motivating you to consistently meet your goals.
Here’s how it works and how Discovery Bank helps you to adopt them.
- Have a plan
Financial planning, which includes having a will in place, is key to long-term success and making smart financial decisions. By gaining more financial knowledge and getting the right financial advice based on your financial needs, you’ll secure the financial future you want and be prepared to manage life’s changes.
Discovery Bank’s role: You can grow your financial knowledge by completing financial education courses with Worth. Discovery Bank also offers you tools and calculators to help you plan for retirement or budget better with the Vitality Money Financial Analyser. In-app access to Estate Planning services also makes it easy to create a will.
The result: You’ll be able to manage your money effectively, set and achieve your financial goals, prepare for unexpected expenses to reduce stress, avoid debt, and make decisions that support your long-term financial growth.
2. Take charge of your spending
Discovery Bank’s research showed that 65% of people don’t know what they’ve spent during the previous month, and that more than half who think they know either overestimate or underestimate this amount. Around 86% of South Africans also spend more than they earn, relying on short-term credit to supplement income. This often leads to a vicious cycle of debt and financial stress.
Discovery Bank’s role: A key behaviour to avoid spending more than you earn is to have a set budget. The Vitality Money Financial Analyser was developed to help manage and track your spending better. This in-app budgeting tool uses advanced analytics and data processing to give you a full picture of your finances, including income, savings and spending habits.
The result: Keeping track of spending helps you develop healthier money habits, spend more wisely, and stick to a budget.
3. Save first, be prepared
South Africa’s household savings rate is estimated to be 0.5% of the GDP, one of the lowest globally. This means many do not have monetary buffers to manage unexpected expenses and are left vulnerable to financial stress.
Discovery Bank’s role: It is essential to save and to make it a sustainable habit of paying yourself first. Studies highlight that people who save at the beginning of the month are better positioned to meet financial challenges. By offering dynamic interest rates, which increase based on your Vitality Money status and how well you manage money, Discovery Bank motivates you to save regularly and helps you grow your savings at a faster rate.
The result: Saving regularly, no matter how small the amount, helps towards building an emergency fund and reduces your reliance on short-term credit when times get tricky.
4. Control debt before it controls you
While having credit is essential for building a good credit score and making larger purchases, it is important to manage credit responsibly. Discovery Bank also offers a dynamic interest rate on credit, which lowers the better you manage your money and repayments.
Discovery Bank’s role: Vitality Money provides insights and encourages you to pay down high-interest debt or larger loans, like home loans, faster. The bank encourages you to be more responsible with credit facilities by rewarding responsible debt management and debt reduction. Its shared-value approach ensures lower credit defaults and improved financial resilience, as seen among Vitality Money clients with a higher status.
The result: Responsible debt management lowers financial anxiety, improves credit scores, and creates better future financial opportunities.
5. Build a safety net before you need it
Unexpected life events, such as job losses or health crises, can derail financial stability. Along with paying yourself first and building up a savings safety net, Discovery Bank encourages having adequate insurance, such as medical aid and long- and short-term insurance, in place to help cover high or unexpected costs.
When insured, you add resilience to your financial wellbeing by having greater financial support when you may need it.
Discovery Bank’s role: Discovery Bank integrates insurance products into its app for easy access to cover, and rewards you for maintaining adequate coverage. By encouraging and simplifying access to insurance, the bank also helps address insurance gaps and enables you to have the right cover in place.
The result: Insurance acts as a financial safety net, ensuring unforeseen events do not compromise your long-term financial wellbeing.
6. Invest for the future
With only 8% of South African retirees achieving the recommended 75% income replacement rate, planning for retirement is critical. It’s never too late to start saving, and the earlier you start, the greater the benefits of compounding interest.
Discovery Bank’s role: Discovery Bank integrates financial education into its services and offers rewards for long-term investments through Vitality Money. Integrating with Discovery’s investment offers, it’s also possible to earn boosts when you invest in qualifying Discovery funds or Cogence solutions.
The result: Long-term investments secure financial independence and contribute to national savings rates and economic growth.
How many of the six behaviours are part of your financial plan? Making small changes to your financial behaviours can help you form habits that change your financial wellbeing for the better. With Discovery Bank, you’ll not only enjoy financial security, but also earn the rewards that come with managing your money well.
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