As the New Year draws close, it reminds
you of the fact that it’s time to set some serious goals. These 10 goals
will help you make lasting changes and take control of your finances,
according to www.thebalance.com.
Whether you choose to do just a few of
them or you are ready to tackle all of them, you can start making
changes. You are the only one that can change yourself and it is
important to have a plan to make your New Year resolutions stick. Take
the time to plan for the New Year today.
According to www.thebalance, these are the 10 banking and financial goals you need to take note of.
Write out your budget each month
This may seem like a simple goal, but
writing a spending plan each month is the first step in getting control
of your finances. If you can write out your budget each month, and put
every naira you earn in a specific place, you will begin to win
financially. This helps you realise just where you are each month. It
allows you to decide how you want to spend your money instead of just
letting it drift away.
Write down every kobo you spend
You should do this for the entire year.
The first month, you may want to physically write down each purchase you
make in a notebook that you carry with you. Sometimes, physically
writing it out makes you more aware of what you are doing. If you have a
smartphone, you should find a budgeting app that allows you to enter in
each transaction as you make it. You can record it in both the account
and the category so you can stick to your budget and recognise your
budgeting weaknesses.
Stick to your budget each month
This is a tough goal, but as you
carefully set up your budget and track it, you should be able to stick
to your budget. You should be spending less than you earn and putting
money into savings. If you can stick to your budget, you will be able to
reach your other financial goals. Find the habits you need to change to
make this happen.
Reduce your debt
Make a specific goal on how much debt
you want to get rid of this year. If possible, you should try to get
completely out of debt. But depending on your income and the amount of
debt you currently have, you may not be able to do that. You should set a
goal that is attainable, but one that you will have to be careful to
reach. Set a number of how much extra you want to put towards debt each
month, and then work to reaching it. If you follow a debt payment plan,
you will speed up how quickly you can pay off your debt.
Don’t add any more debt this year
This goal is key if you are serious
about getting out of debt. The one exception you may make to this goal
is if you are ready to buy a new home. This means you need to stop using
your credit cards. You should try to get by with your current car or
save up cash for a new car. If you can commit to yourself that you will
no longer borrow money, then you can plan ahead for major purchases, and
really make a dent in the amount of debt you have.
Save up an emergency fund
The size of your emergency fund really
depends on your current situation. If you are still getting out of debt,
you should have a smaller emergency fund until you pay off your debt.
You should quickly save up between N50,000 and one month’s income. If
your job is more volatile or the amount you make changes, one month of
expenses will help you handle the slow months. If you are out of debt,
work towards saving up between six months to a year of your expenses.
Start saving for retirement
If you are working for a company, you
should contribute up to the amount that the company will match until you
are out of debt. Once you are out of debt, then you should begin
contributing about 15 per cent of your income. The amount you get from
your employer’s match should count towards that 15 per cent. Otherwise,
you should contribute about five per cent until you are out of debt (not
counting your mortgage). This allows you to start building your
retirement savings, while still freeing up money to put towards debt.
This is particularly important if you are not in the Contributory
Pension Scheme.
Better your career
In the New Year, you need to do
something to advance your career. If you love your job and you see
yourself staying there for the next 10 years, you can still find
something you can do to improve your career stability and to prepare
yourself for the next step. If you are not happy, you will be even more
motivated to make those changes. Look for a class that you can take to
gain additional skills or to prepare you to move up to a higher position
in your company.
Set up a long-term financial plan
A long-term financial plan will address
all aspects of your finances. This plan should outline a timetable of
when you will purchase a house, when you will retire and any career
changes you plan to make. It should also include an investing strategy
and a plan to build wealth. This plan will help you make financial
decisions over the next few years, and can be one of the most beneficial
things you do. A financial plan can be more effective than just setting
random financial goals without looking at the bigger picture. Your plan
may be different if you are single than if you are married, but it is
essential to have one no matter what your relationship status is.
Cut spending in at least two different budget categories
This is a goal you can work on once you
have your budget planned out, or that you can begin working on now. You
may want to choose one category each month through the year to look for
ways to save money. You may find that you need to keep working on the
same category, so that you can continue to find ways to save money each
month. If you can slash your spending a bit more each month, you will
have more money to put towards your other financial and savings goals.
Smart financial resolutions
A new year is a great time to set new
financial goals and look at the habits you may have formed in the
previous year that could be improved to help build your financial
future. Here are five great tips to help you set a firm financial
foundation for 2018, according to www.bankaust.com.au
Rethink your financial goals
It’s hard to get ahead unless you set
goals to help grow your wealth. So, a new year is a great time to
revisit any existing financial goals. This is especially important if
your circumstances have changed over the year; for instance, if you
started a new relationship, had a baby or retired.
It might be an idea to talk to a
financial adviser about what your financial goals are and then put in
place a plan to help you reach your goals – be they to buy a house, or
save for an investment property or whatever your personal circumstances
dictate.
Be honest about your bad habits
Most of us could take a good look at the
way we spend our money and, if we’re honest with ourselves, make
substantial changes. The New Year is a great time to do this.
The idea is to look at where you’re
wasting money and think about how you could change this. For instance,
you might tend to do a lot of grocery shopping at an expensive corner
store rather than at a more cost-effective supermarket. Choosing less
expensive shopping habits is just one way to put yourself in a better
financial situation this year.
Change your behaviour
The New Year is also a great time to try
out one or two new ways of building wealth that you may not have tried
before. For instance, now’s a great time to set up a new savings account
to help you put more money aside so that you’re in a better financial
position down the track. Even if it is just N5,000 a week, every bit
counts and you can always add to this amount down the track as your
financial position improves.
Educate yourself
Financial markets are complex but fascinating and there are lots of ways you can improve your knowledge of how money works.
For instance, Ross Gittins is an economist who makes financial concepts easy to understand.
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