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Don’t let money control you, manage it

A recent study found that less than 25 per cent of people feel they are “very well prepared” to handle financial matters.

Seventy-eight percent said it is very important that they not become a financial burden to their loved ones, but just 24 per cent are confident they can pull that off.

To help you move to the group of those prepared, here are some steps you should take:

Step 1: Get a grip

Track your spending

Why it’s important: You know the big-ticket expenses in your life, but the smaller spending can also be a killer.

Take a look at your monthly outflow, and I guarantee you will have a few “Yikes, I had no idea” moments.

Do this now: Gather up your bank and credit card statements. Then go to SuzeOrman.com and click on Suze’s Expense Sheet.

Input your average monthly expenses, and get honest about where your money is going.

Calculate your net worth

Why it’s important: We tend to focus on assets and forget about debts. Financial security requires facing up to the big picture: assets minus debts.

Do this now: Type “net worth calculator” into any search engine and you will find plenty of free online tools to help you take stock of your assets and debts.

Cut spending by 10 per cent

Why it’s important: The median pay raise for 2013 is expected to be around three per cent. So challenge your family to give your budget a 10 per cent raise by cutting your spending 10 per cent.

Do this now: Once you input your income and outflow into the Suze’s  Expense Sheet, print it out and circle every expense that is a want (not a need), then figure out how to reduce or eliminate it.

Step 2: Find hidden savings

Shop for insurance deals
Why it’s important: You’re always looking for the best prices—why not on home and car insurance, too?

You’re nuts if you don’t comparison shop for car insurance; you could save 10 percent or more. (But don’t reduce your level of coverage. You want the right coverage for the best price.)

Check out a Sacco

Why it’s important: Saccos are often a better deal than banks and tend to pay higher yields on deposits and charge lower interests on loans

Do this now: Most organisations have created saccos for their staff so if you are in formal employment, commit to joining this month. Even if you are not employed, most Saccos have opened up membership to outsiders. Find one and join it.

Step 3: Build security

Boost your emergency fund

Why it’s important: If you have started saving, keep at it until you have at least eight months’ worth of living expenses.