Assets and Liabilities

An asset is something that you own:

  • Life insurance
  • Property
  • Shares
  • Investment policies
  • Cars
  • A retirement annuity
  • An endowment policy.

A liability is something that you owe:

  • Credit card debt
  • Hire purchase or lease
  • Overdraft
  • Store credit
  • Personal debt
  • Bond
  • Unpaid tax.

Seeing the value of your assets, minus the value of your liabilities, shows you your true financial situation, otherwise known as your ‘net wealth’. For example, if you buy a property for R500 000 and still owe a bond of R400 000, then your net wealth is R100 000.

If you know your net worth, you know how much you can afford to borrow, spend or save.


Go to the AF Online budget tool

A budget helps you:

  • Take control of your finances.
  • Keep an eye on expenses.
  • Manage debt.
  • Plan for events and emergencies.
  • See where you can save money.
  • Identify what your income needs will be to maintain your lifestyle when you retire.
  • Become the financial director of your life.

To set up a budget, you need to list all of your income and expenses. You must be honest when you assess your income against your expenses so that you know exactly how much you can spend or save on a monthly basis. You can also start a debt payment plan and work towards saving for the future.