Should you rather: finance edition

Published on 1st October, 2025 at 10:19 am

Should you rather: finance edition
The experts weigh in on how to tackle common tough financial choices.

… pay off your debt OR save for an emergency fund?

Bad debt can be a trap, while savings and good debt can be your key to freedom. “Bad debt – the type used to fund a lifestyle beyond your means – should be paid off as quickly as possible if you have some disposable income,” says André Wentzel, Head of Client Solutions at Sanlam. If you only have responsible debt i.e. used to fund investments in property or education, Wentzel says having an emergency fund can help you avoid getting into trouble with your debt by covering your expenses including instalments for a period, and avoid forfeiting your assets.

… save for your child’s education OR save for retirement?

Delaying saving for retirement can be a recipe for disaster – not something you’d want to burden your children with. “You can’t borrow for retirement; however, you can borrow for your children’s education, normally at very good rates,” says Danelle van Heerde, head of advice solutions at SanlamConnect. Besides benefiting from the power of compound interest, opting to save for retirement sets a good example of healthy financial behaviour for your own children’s retirement planning.

… sell your house OR dip into your own retirement savings?

“To dip into your retirement savings is never advisable,” says Conrad Koorts, Certified Financial Planner® and investment specialist at Firebird BlueStar, underwritten by Sanlam. Both Wentzel and Koorts suggest downscaling your living expenses to make ends meet. If you can afford to keep the house, rent a more affordable property and lease out your house to cover bond costs, suggests Koorts.

… take out a personal loan OR load debt onto credit cards or overdraft facilities

Consider the interest rate, term and your budget, suggests Koorts. “Credit cards and overdraft facilities tend to be easier, but have a higher rate and shorter repayment term,” he explains. “If it is a medium- to long-term expense, like for studies, I would rather opt for a personal loan.”

… cash in my retirement savings OR preserve them if retrenched?

Preserve, if you can, say both Wentzel and Koorts. “Beside the tax advantages, you may never be able to catch up on your retirement savings,” says Wentzel. To add, you would also lose out on the benefit of compound interest if you cash in, and it could impact the fees you have to pay, too. “Preserve as much as possible, especially if you are getting a severance package together with the retrenchment,” says Koorts.

… retire at age 65 OR work for a few more years?

“The longer you work, the shorter the term you need to provide yourself with retirement income, the more likely you will be able to have enough capital to provide you with an income for the rest of your life,” says Koorts. If you can manage to work longer, then do.

GET EXPERT ADVICE

This article is not intended to replace the advice of an expert, a professional financial planner or a debt counsellor. Don’t make tough financial decisions alone. A qualified financial planner can help ensure you make the right choices suited to your specific needs. Visit sanlamreality.co.za/contact-an-adviser to book a meeting.