Get serious about your finances in 4 steps

Does it feel as if the good intensions you have for your finances are always too short-lived? Are your finances plagued with a series of bad money decisions for every good one you make?

If so, follow this four-step guide to get it right:

Step 1: Give yourself a reality check.

Take out your bank statements, retirement fund statements and a calculator. And do the following math:

  • Your emergency fund should contain a total of three to six months’ expenses so you are covered should the unforeseen happen. How much do you have saved? How much do you need?
  • According to a study done by AlphaWealth, your child’s schooling (primary & high school) can cost anything between R1-million to R7.7-million (depending on the type of schools). How much have you saved yet? How much do you need?
  • According to Fin24 you need 15 times your current annual salary in order to retire at 65. How much have you saved yet? How much do you still need?

Step 2: Plan for change.

In order to become serious about your finances you will have to change whatever you are currently doing wrong. And as we all know, change is not easy.

Plan for the financial change you want!

  • Do a SWOT (Strengths;Weaknesses;Opportunities;Threats) analysis There is a very good reason why companies that complete an annual SWOT analysis make better choices. So should you. Think long and hard about the strengths, weaknesses, opportunities and threats relating to money and you.
  • Create a foolproof plan – Based on what you have learned from the above, construct a plan you will be able to follow. If you have to make many cutbacks in order to realise your plan, perhaps start by making smaller cutbacks and ease into it. Revise your plan in 6-months’ time and tighten the belt a little more.
  • Get your head in the game – The best plans and the greatest intentions mean nothing if your head isn’t in the right space. If you have this right, you are heading for a win.

Step 3: Put your money where your mouth is.

It is time to take action. Set up accounts, and follow the budget and plan you have created. Get into the habit of actioning your plan each month the very moment your salary is paid.

Step 4: Track yourself.

We are all just human in the end. One of the main reasons we don’t stick to the financial plans we create for ourselves is because we feel discouraged after failing. Don’t! Keep track of your plan, and if you’ve fallen behind on one of your goals, adapt the plan to make up the difference and catch up.

If a history of playing seesaw with your finances have caused you to fall into debt, get serious about your financial situation by asking for help. Let Debt Rescue help you get where you need to go.

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