If the first few weeks of 2017 are anything to go by, we are in for a marathon year ahead. How do we prepare for it? Here is an eight-step circuit to becoming financially fit

1. Start doing

We often talk about budgeting and planning our finances better, but unless you really get up and do it, it’ll remain just that: wishful thinking. Decide why you want to improve your financial situation – don’t wait for overdrafts, unpaid bills or black marks on your credit record to catch up with you.

2. Set your financial goals

Before you can start planning your financial future you need to establish where you’re at – what you own and spend every month. The South Africa division of one of the world’s largest independent financial advisory organisations, deVere Acuma, suggests that you take some time to think about your financial goals.

These could be of a savings nature (paying for your children’s tertiary education, going on that Zanzibar trip), life goals (marriage, children, relocating to a global city, starting your own business, retiring earlier) or goals to manage the damage (paying off your credit card, settling debt, creating an emergency fund or simply learning how to live within your means).

“You can then set achievable goals for 2017 – within realistic timeframes – and start working towards a financially fitter you,” says Gavin Smith, head of Africa for deVere Acuma. If you feel overwhelmed, speak to a financial advisor to make this process more manageable but remember, your “why” will direct you.

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Initially you might need to monitor your monthly spending to find out exactly where your money disappears to (be prepared for an eye-opener!).

3. Work out a budget and savings routine

Initially you might need to monitor your monthly spending to find out exactly where your money disappears to (be prepared for an eye-opener!).

Now you can work out a budget and regular savings routine – both practical ways of taking control of your finances, according to deVere Acuma. Your budget should include all of your needs (50%), some of your wants (30%) and, most importantly, a savings component for emergencies and the future (20%). Don’t be discouraged if your must-have’s make up 70% of your expenses at this point – most people’s do.

Draw up a spread sheet reflecting your after-tax income and estimated expenses, divided into: “essential” (for you to work and live), e.g. mortgage or rent, electricity, rates, medical aid, childcare, transport, groceries; “nice-to-have”, e.g. gym memberships, eating out, travel, latest gadgets, entertainment; and items you “can-do-without”.

deVere Acuma recommends adopting a savings routine by transferring your left-over income as a debit order into a savings or investment account. Begin with small amounts and increase these once you’ve adjusted your lifestyle to your new spending pattern. “A crucial part of the fitness routine is to continuously revisit and tweak your budget as your expenses and priorities change,” says Smith.

“A crucial part of the fitness routine is to continuously revisit and tweak your budget as your expenses and priorities change”

4. Source a fitness instructor

When getting into shape financially you need to enlist the support of a close friend – preferably one who’s already financially fit – to hold you accountable and steer you away from falling back into bad spending habits.

Even better, you could approach a financial advisor to help you monitor your expenses and make smart financial decisions. “A planner can also create a personalised financial roadmap and investment portfolio for you – an important step towards achieving financial security,” explains Smith.

5. Shake off the debt

Toxic debt such as that of a credit card can sneak up on you and devour your budget. At first sight paying it off looks like an uphill battle, but if you start by paying small amounts above the minimum payment every month, it could shrink your debt dramatically and help you shed it sooner.

deVere Acuma advises that you put any extra money you can towards paying off debt – consider generating an income on the side, airbnb-ing a room or selling unused items. “Try and negotiate a better interest rate and resist the temptation to open any new credit cards,” shares Smith. “Carrying debt can be a massive burden and make you feel trapped and powerless.”

“Carrying debt can be a massive burden and make you feel trapped and powerless.”

6. Push yourself to save

“Financial fitness requires a mindset change – from being comfortable with poor spending patterns to transforming your expenditure by cutting out mindless spending,” says Smith. “You’ll have to train yourself to acquire the tough habit of saving.” Another good tip to stay on track is to regularly review your budget – roughly twice a month.

7. Reward yourself

Allocate a small amount of money ahead of time for treats and splurge sensibly – it could be a luxury splash such as a weekend away (but remember to look for bargain deals). “You don’t always have to give up on the finer things in life,” says Smith.

8. Track your spending

Congratulations! Now you’re ready to put measures in place to keep following a financially in-shape lifestyle. Track your spending with mobile account apps, online banking or SMS notifications of withdrawals and payments. Speak to a financial advisor about investment options. “It’s important to ensure you have the right retirement, personal insurance, income protection and risk management plans in place,” emphasises Smith.

Before you decide to invest, make sure you have a solid emergency fund (at least three months’ monthly expenses) ready to provide for those “what if’s”. You never know what financial surprises 2017 might bring.

deVere Acuma proposes that you create a savings fund by setting aside an attainable amount every month for unexpected expenses such as unplanned home or vehicle repairs.

“Financial fitness means freedom. It may not be easy to master at first, but it will bring you peace of mind and enable you to spend without having to worry about money troubles later on,” concludes Smith.  You’re improving your overall financial situation and will feel far more secure about the future.