Hey guys, I’ve got a great guest post for you today from my pal Nazeem.

Hello reader, I’m a South African financial blogger and I’d like to share some of my experiences with you. As a South African, I’ve found that I’m frequently reminded of the importance of financial planning. But how many of us take this advice to heart? It can seem rather daunting a task to set up and adhere to a structured plan for your financial life. Do not be intimidated by the word strategy. In fact, I learnt to embrace it, because it’s simpler than you think.

If you keep in mind the following three ideas when taking a look at your finances the whole process of financial management becomes that much easier. Remember the first rule of business is that you are out to accurately gauge the exact current status of your finances. Secondly, you wish to define goals for your financial future. And lastly and most importantly you want to set up a clear and practical plan to help you get there.

The easiest way to get an overview of your finances as it stands now to put together a personal balance sheet. As far as financial goals go these will vary from person to person, but in most cases, they usually involve long-term objectives like comfortable retirement and seeing to the higher education of your kids.

Getting smarter about how you are going to achieve the bigger financial dreams you have will take some work, however. To be prepared for the road that lies ahead remain focused by incorporating the following ideas into your strategy.

Watch How You Spend

As soon as you learn about your spending habits the better. Make this learning easier for both yourself and your family by adopting a schedule for recording money spent. It will guide you to discipline your usual spending pattern as well as find opportunities to save more rather than spend.

Become Clever with Credit

According to Wonga, many South Africans are yet to learn about the differences between good and bad debt. In a survey involving more than 18000 participants, it was discovered that almost 5% of the participants would take out a loan for holiday trips, electronics, and clothes.

The thing is borrowing money becomes quite an expensive affair over the long term. So it’s best to only consider borrowing for things which carry obvious long term value like a vehicle for example.

Being smart with loans means being fully aware of a variety of factors including ‘shopping around’ first for the best possible rates and terms that you know you can realistically afford. Find out enough information as you can about the interest rate, and the recurring financially commitment you are entering, and the exact duration of repayment.

Saving Regularly Builds Wealth

It’s a good idea fix your savings plan by having automatic deductions coming off from your earnings every month. This also negates the need to try and discipline yourself because you have proven your commitment to saving by sacrificing the freedom to decide a new amount to save each month. The strategy here simply takes the heavy lifting off you because you have predetermined an amount you can afford, and the then the rest is taken care of without you noticing. Yet you are well aware of the strong financial position you are building as time goes on by saving consistently.

You Must Invest

No doubt there are risks attached to putting your hard earned money into a portfolio of investments. But once you learn to read those risks against the potential of high returns you are well on your way to earning the fruits of financial planning. Take the time to familiarise yourself with diversifying your investing, allocating your assets, and working out the costs associated with particular investment options.

About the author: Nazeem is a South African currently residing in the UK. He’s been a full time blogger for over 8 years, specialising in the finance industry.