Only some of us make up New Year’s resolutions each year, but of those, I don’t think more than 10% succeed. This may be even more true for financial resolutions.


Although it’s normal to reflect on the past year and make changes for the new year, we can shatter our financial confidence if we don’t keep our promises to ourselves. It could be that your resolutions are too extreme or unrealistic or perhaps you try to make too many changes in one year. In some cases, circumstances we did not plan on can also influence our financial behaviour.

My advice to you is to keep it simple. Consistently making smaller changes in how you view finances, will bring about more positive and sustainable change in the long term.

Here are three steps to follow in 2016 to bring you closer to financial freedom:

Step 1 : Analyse your spending every month


(January to December 2016)

What you do:

•    Keep all your slips, keep each month’s slips separate (use envelopes or a flipfile) and keep your cash slips separate.

•    Put the slips on a spreadsheet at the end of each month.

•    Be specific and detailed. For example, don’t just put in a total spent on food but split it between groceries for the house, eating out and take-aways. Split what you spend on clothes, shoes and make-up. Also split your monthly phone and data subscriptions with your top-ups during the month.  

•    At the end of each month, get your bank charges from your bank statement and also check that you have cash slips for all the ATM withdrawals you made in that month.

•    Analyse the slips in any other way that will help you determine your spending patterns. For example,  write on the slips on what day you spent it and if weekends are worse, then make a plan to change where you hang out on Saturdays and Sundays. Also analyse where you spend the most, for example clothing shops or restaurants.

•    You must have at least six months’ worth of information to thoroughly analyse your expenses but continue for as long as you can (I still do this each month for the last 10 years). If you find you spend too much for your income (or if you don’t save or have too much debt), try and make changes by limiting yourself on some of the expenses.

•    Most people I know change their spending habits when they see first hand where each cent has gone,  making you grow into a budget in stead of setting up a budget first (like resolutions) and not keeping to it.

•    If you see your spending does not decrease at all after a few months of analysis, then you may need to call in a family member or friend who you can be accountable to. This person, preferably someone who manages their own finances well, can help you track your spending.

•    As you start to spend less, try and put that money in a separate bank account (as if you had spent it) and start building up a cash fund for either settling debt or to use as an emergency fund.

Step 2 : Do research and educate yourself


(July and August 2016)

After analysing your expenses for at least six months, use the following two or three months to educate yourself about financial matters. Use the internet, read books or talk to friends or family who make good financial decisions. For example:

•    Make notes as you do your research on what you understand and important, what you don’t understand about financial matters.

•    Investigate how investments work and what type of investments are available out there, what benefits you think each one may have for you and what you don’t like of each option.

•    Do research on what it means to be financially balanced and healthy and compare it to your spending habits of the slips you summarised in the first six months.

•    Study some people who are financially free (like Richard Branson) and what they had to do or sacrifice to reach their financial dreams.

•    Make a list of what motivates you to make financial changes or to save more and also a list of what tempts you to not follow a budget.

•    Do research on life insurance and what kind of benefits it offers and see if you or your family can benefit from any of these products.

•    Do research on setting up a Will and Last Testament if you don’t have a Will. If you have any assets (like a car) or any debt, you must have a Will.

Step 3 : Make an appointment with a financial planner


(September to November 2016)

Make at least an hour appointment with a financial planner. Take your notes and your spending summary that you have up to this point. Ask questions on what you did not understand while doing research. Also ask for advice on your spending habits.

When you make the appointment,  check if the advisor charges professional fees.  Make it clear to the advisor that you will not be buying any products at your first appointment and that the time is for you to improve your savings so you can commit for a new product as soon as possible.  If you have debt,  first use monthly savings first to settle debt.

Every financial decision has a consequence. Be honest with yourself when you analyse your spending habits. Develop a financial vision for your life so that you can work towards it. Do you want to buy a house? Do you want to retire care-free one day? To have a vision will help you set goals to help you stay true to your financial dreams.