Often coaches and captains of sport teams who have lost will make a standard comment during the post-match interview: “We need to go back to the basics”. This comment holds true and is equally true in our daily lives and when taking care of our financial wellbeing. We often tend to underestimate the importance of applying the basics correctly. When you have a rock solid foundation, you can build any structure on top of it and it will remain solid. Therefore we are going back to the basics of good financial management:

   1. Set financial goals and have a plan

If you don’t have financial goals in life, the likelihood of you becoming wealthy and financially independent is fairly slim. Financial goals can include a variety of things and it will differ from person to person. Financial goals can include: to retire comfortably; to be able to live the lifestyle you dream of; to afford that overseas holiday; to send your children to university; to repay your bond; to start your own business; to buy a new home theatre system or those snazzy high-heels and to be able to provide for your family. Whatever your goals might be, write it down and then compile a plan to get you to achieve your goals; otherwise it will forever remain a dream and you will never realize it. When you have a goal and a plan and you are actively working towards it, you will achieve it. You can achieve anything you set your mind to if you believe it and work hard for it. But you need to take Action!

2. Discipline

Having strict discipline when it comes to your money will hugely benefit building your wealth. Discipline plays a vital role in multiple financial decisions. These are a few easy techniques that can help you to apply good financial discipline:

  • Don’t spend more than what you earn. Prepare yourself a budget and keep to it. If you cannot afford a certain expense refrain from buying it. A budget is an effective tool to help you monitor your expenses and help you not to over spend.
  • Saving money should become a lifestyle. Set-up automatic debit orders to deduct your savings each month when you receive your salary and transfer it to an investment account. By transferring the money out of your operational account, you won’t be tempted to spend the money. Sooner than later your pocket won’t even feel that you put money away.
  • Develop a mind-set of ‘cash is king’. If you cannot buy it cash, don’t buy it. It is not always possible to buy houses and cars cash, but avoid using debt to pay for luxury items like bigger TV’s, holidays and clothes. Teach yourself the discipline to wait until you have saved up sufficient money to buy it cash.

3. Time equals more money

The younger you are when you start taking your financial future seriously, the more you will gain from it. Very few people make mega bucks overnight. Most people build up a solid wealth portfolio over a period of time. This is where the principle of ‘time value of money’ comes into play. Over time your money will start working for you. You will start earning interest on interest. You will earn maximum return on your investment in unit trusts, shares, off-shore investments or properties when you wait until the specific markets are performing at a high before you cash it in. Time also plays a crucial role when it comes to retirement planning. Don’t delay putting away money for retirement because you believe you are still young and very far from retirement age. You have limited time to save sufficient money to retire comfortably one day. Make proper use of the time you have left by starting today.

4. Start small

Often when I coach people, they will say “I don’t have lots of money”. That is not an excuse. You don’t need thousands to start saving or to put away for retirement or to pay additionally on your debt. Start small but at least make an effort to start. Every little bit helps. I can guarantee you if you track and analyse your expenses on a regular basis, you will most likely find an expense that you can live without. Use that money to start working towards your goal; no matter how small it is. If you read the life stories of the very wealthy people, you will know that very few of them started off with lots of money. The majority of wealthy people started off small, but they had a goal and a plan and they worked hard to achieve it.

5. Plan for the unexpected

Those unexpected emergencies are often the root-cause for derailing your financial position. When you think this month I am going to have extra money; an unexpected emergency appears from nowhere and there your extra money disappears again. It is crucial to build up an emergency fund as soon as possible. Put away money that you can utilize when those unexpected emergencies creep up again. Those unexpected emergencies can include for example: your car breaks down and the motor plan doesn’t cover the costs; you suddenly get sick and the medical aid doesn’t pay for it; your geyser bursts; your laptop crashes or your child needs money for a school tour. It is important that you have access to money that you can use for these emergencies rather than using debt to fund it.

Go back to applying these basic principles and your financial situation will definitely benefit from it. If you build a solid financial foundation; it will become a lot easier to create financial independence and a wealth portfolio on top of it.


This is the unedited version of the article that was published in Shine Magazine, April 2017.

Written by Ronel Jooste

CA(SA) and Financial Coach

Contact Ronel: ronel@financiallyfitlife.co.za

For more information about my financial wellness programmes visit my website: www.financiallyfitlife.co.za/financial-wellness