Planning personal finances

Helpful tips to help you overcome various challenges.

While planning your personal finances is important, life can be unexpected. In many ways, organising your life in order to be an asset to your family and community is like running a successful business. From managing your finances and your reputation to networking and planning ahead, there are many parallels you can draw between the two.

Just like a growing business, we face various challenges, overcome obstacles and, hopefully, go from one milestone to the next, all the while working towards achieving our long-term goals, including financial security when we retire and can no longer work to earn an income. 1.

A solid strategy is the base of any successful endeavour – no business survives without one, and neither will your finances.

Creating your plan begins with documenting all income and expenses to predict future cash flow. From this, you will be able to

Have a plan

see which areas to prioritise and where to cut back to stay on track to achieving your long-term goals. 2. Key to running a successful business is keeping operating costs to a minimum by cutting any expenses that aren’t consistently contributing to greater profits.

Similarly, in your personal life, you need to cut back on any monthly expenses that don’t add real value to your life.

This might mean letting go of your expensive – and often unused – gym contract, cancelling that satellite TV package that you never use, or downgrading to a more affordable car or house.

Minimise ‘operating’ expenses

3. Multiple streams of income are the key to business success and it’s no different when it comes to your personal finances, should you have the need for it.

The 2017 Old Mutual Savings & Investment Monitor found that rising prices and the ailing economy are driving some South Africans to work multiple jobs to provide additional income. 4. Just as a business owner would insure the business against any possible incidences that may impact future revenue, such as a fire, the passing of a co-owner or theft, you

Diversify/multiply your income streams Insure yourself against risks

should insure yourself against risks of illness, injury or the passing of a breadwinner. It is also important to make sure your assets are adequately insured. 5. A business is nothing without a strong workforce and in the case of personal finances, that workforce is you. It’s recommended you pay yourself first every month. 6. Poorly-managed debt can cripple a business – and its effect on your life can be equally dramatic. Don’t borrow more than you can comfortably afford to pay back.

Always pay yourself first Keep a close eye on your debts