Pay off debt: It is always best to pay off high interest debt like your credit card. If you want to use your credit card for convenience set up a debit order so that it is paid in full at the end of every month.

Emergency fund: Everyone should have an emergency fund. Save some money into a bank account until you have at least two months of salary put aside. This can be kept in a fixed deposit which offers a better interest rate. Nedbank has an excellent new product called Easy Access Deposit which is a fixed deposit but allows you to access 50% of your money within 24 hours. Capitec also offers good interest rates.

Goals for saving: Part of forming a financial plan is setting out your goals and what you need to achieve them. The rule of thumb is that for savings of less than 2 years invest in cash in the form of a fixed deposit. When investing for between three and five years you can consider high income funds which invest in government bonds and property, and finally for investments of longer than 5 years you can invest in equities which are effectively companies listed on the stock exchange (JSE). You would access equities through unit trusts or exchange traded funds.

Pension: Make sure you are investing in a pension fund and if not, consider a retirement annuity. These products offer excellent tax benefits.

Insurance: Make sure you have appropriate risk cover like disability and income protection that will pay out if you can’t work. This becomes even more important if you have a family to support.

Value for money: Costs are an extremely important part of your final return on your investment so make sure you understand the costs of both the product and the financial advisor. Good advice is worth paying for but the advisor must continuously work with you to ensure you meet your goals and not just disappear once the commission has been paid.

Investment options: The Satrix range of investments is a good beginning as it is very low costs and you can invest directly. These track the major South African companies and details can be found on www.satrix.co.za. Most investment managers recommend the Satrix RAFI.

Saying that there are some good unit trusts which have performed well, but again check what their upfront fee is and their annual costs. Nick Brummer of Investonline.co.za talks about “premium” brand unit trusts which include: Nedbank Rainmaker, Allan Gray Equity, Coronation Top 20, Prudential Equity and Investec Equity. Unlike Satrix a unit trust can provide exposure to different investments. So if you are going that route consider one unit trust that provides exposure to offshore investments, property and equities or alternatively you can invest through Investonline and have a spread of unit trusts according to your risk profile for R500 per month.