In life, it is said that you are what you do. This means that when you are viewed from the outside, the only thing people can judge you on is your actions, not your intentions or motives. This rings true for our financial position – it is what it is because of daily actions and not because of our daily intentions.

We know that we need to take various actions today, such as controlling our expenditure and preparing for our financial future. But many of us can be compared to the crow – easily distracted from our goals by shiny objects. There is always that one ‘shiny object’ that we just need immediately. We tell ourselves, “Once I have met this need, I will start saving, or get my insurance or will up to date.” The problem is that there is always another ‘shiny object’ that we ‘cannot’ live without.

This global pandemic, and the resultant financial impact, has highlighted a lack of planning. Sadly, many people have lost part or all of their incomes. This is because their entire income is used to fund their lifestyles, supplemented by debt. Most people have no emergency funds and debt repayments that match their incomes.

When I discuss reducing expenditure and maximising savings with clients, I am often told that there is no way that they can live off less. They tell me that when they earn more, they will save more. Unfortunately, it doesn’t often work out this way: in many cases, when one’s income increases so does spending. A bigger house and a smarter car are seen as ‘essential’.

So, what do we need to do? Decide what you want your life to look like, and how you will go about achieving this. This needs to be specific and reasonable. Ask yourself questions like what area do I want to live in? How many vehicles do I need?

Now the hard work starts and you will need to consult with your adviser:

1. Create an emergency fund of at least three months’ expenditure.
2. Settle your debt. Start with your short-term, high interest-bearing debt first and work your way through repaying the rest as soon as you can.
3. Start investing. Meet with your adviser to assess your goals to provide for education, vacation, retirement etc. Your adviser can help to calculate the future value capital required to achieve these goals, and work back from there to calculate the monthly contributions required.

These are the simple steps but like anything worthwhile, it will take discipline and dedication.

In closing, I leave you with a quote from Epicurus, “Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things that you hoped for.”