Financial planning is not about luck

Written by Your Future Now

Making your money work for you is not about luck; it’s about the four steps that take you to financial wellness. We know that as a nation we are not good at saving. Many people don’t have a fund for emergencies and many more will not enjoy a comfortable retirement. Faced with these challenges, one can be tempted to buy a Lotto ticket, or bet on the horse everybody says will win Saturday’s big race.

The problem with this course of action is that you have no control over the outcome. The smart option is to implement these four steps to stay financially healthy:


  1. Know your money

Know your credit profile and what you should do to improve it. Your credit profile tells you how creditworthy you are, and what you should do to improve your status.

You are entitled to one free credit report per year from one of the registered credit bureaus. If there are any mistakes in the report, inform the credit bureau immediately.

To improve your credit profile, you should:

  • Pay your loans on time every month.
  • Not open many accounts in a short time.
  • Not apply for loans with various credit providers at the same time.
  • Close accounts when they are paid up.
  • Use only one type of credit; not, for example multiple short-term loans.
  • Keep your personal information safe and report any fraudulent transactions to the South African Fraud Prevention Services (SAFPS) on 0860 101 248.


  1. Plan your money

Draw up a budget and stick to it, and track your spending so that you know where your money goes.

A budget is important because it:

  • Helps you to understand where your money goes every month.
  • Warns you upfront of potential problems.
  • Helps you to plan better and reduce unnecessary spending.
  • Helps you understand the impact of your financial decisions.
  • Shows if you can afford new debt, and how much.
  • Puts you in charge of your finances and helps you feel in control.

Budget tips:

  • Be 100% honest and do not underestimate your expenses.
  • Keep your budget simple.
  • Write down every cent you spend, and use this record to adjust next month’s budget if necessary.
  • Include your savings and money you put away for emergencies.


  1. Control your money

Use credit wisely and only borrow money that you really need and know you can afford.

It is important to stay on top of your debt because:

  • That’s how you maintain a good credit record.
  • It will help you to get credit in the future.
  • You don’t pay additional fees and charges.
  • You could qualify for lower interest rates in the future.

If you cannot repay your debt, there are a number of things you can do:

  • Let your credit provider(s) know before payments are due.
  • Negotiate a new agreement with payments you can afford. (It is very important that you keep to the new arrangement.)

Do whatever you can to prevent legal action from being taken against you. It will only add more costs and charges to your debt. If you are so over-indebted that you cannot make arrangements with your credit provider(s), you can apply for formal debt counselling through the National Credit Regulator on 0860 627 627.


  1. Grow your money

Save every month so that you have an emergency fund and money to spend on special occasions.

Far from spoiling your fun, saving helps you to:

  • Be prepared for emergencies.
  • Provide for your family without getting into debt.
  • Achieve your short- and long-term goals, such as education or retirement.
  • Afford things you need or want, such as a house or a vehicle.
  • Have fun with your loved ones by going on holidays or enjoying little luxuries.


Here are some tips to help you save:

  • Make saving a priority.
  • Have a savings plan that is part of your monthly budget, and stick to it.
  • Pay off debts as soon as you can and then save the money you used to pay on instalments.
  • Instead of buying a snack or a drink every day, put money in your savings jar.
  • Your car’s value depreciates every year. Use this fact to negotiate a lower premium with your insurance company, and save the difference.
  • Give up expensive habits, such as drinking, smoking or gambling.
  • Make your family part of your savings plan and have fun with it together.
  • Put your saving into a separate account and do not touch it until you have reached your savings goal.

By following these four steps, you make your own luck when it comes to having money now and for the future.




Article Categories:

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Menu Title