Face up to your financial position.
This is the first and hardest step.  Most of us are procrastinators anyway, and look for any excuse not to act decisively.  And we may know that our finances don’t look so rosy anyway! If you can face checking out the state of your bank balance, as well as all your debt, you have made a major start on the road to saving for a better future.

Pay off that debt.
Don’t fall for that old line that it is more important to start the savings habit than it is to worry about your past problems.  You are paying a fortune in interest and fees for those loans, credit cards and store cards.  Pay them off as fast as you can, cut up all cards, except perhaps for a general credit card and then make sure that you pay the full amount every month.  Once achieved you can think about the next step on the road to fortune.


Get started.
This can also be difficult, especially when faced with a number of options.  Choose a savings plan that is flexible (in case you run into problems with the savings habit later) – it must allow you to stop and start if necessary, without any penalties.  Find a plan that you can understand and that allows you to put away something monthly – and make sure that it is taken off your bank account as your salary or wage is deposited.  Ask what costs you are paying to make your monthly payment.  If you are making all the effort to save, you want your money to work for you – and not the bank or investment company.


Set yourself some goals.
We all need rewards, and the same applies to your savings habit? So make sure that you know what you are saving for – and how long this will take.  Generally, the longer you save the more chance you give yourself to build up a decent nest egg.  Make sure you set a goal that you can look forward to.


Be realistic.
So maybe you are proud of yourself for starting the savings habit.  But don’t expect miracles overnight.  Your money needs time to grow – and time to gather. Be realistic too in your choice of savings plan.  If you are saving in a unit trust, understand the risk level of that particular plan. – and make sure that you don’t ask the money market funds to give you the often higher returns of a riskier bond or equity fund.


Take a long term view.
It has taken South Africa over 10 years of democracy to build a credible reputation in overseas markets and a healthy economy.  Give your savings plan the same kind of time and you may should be delighted with the results.

 Six steps to get into the habit of saving money
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