The new year always brings about renewed hope and excitement for the year. For many, this is the time to set new year’s resolution or goals. For example, at the beginning of 2019, one of my goals was to run at least 1, 000km for the year and because I have never considered myself a runner, I had to come up with a plan to achieve my goal. I calculated that if I ran at least 5 km for 4 days of the week, I would certainly reach my goal by December.
This year, instead of setting goals at the beginning of the year, why not give yourself a head start by writing down your financial goals now for the new year? This can positively affect your spending habits throughout the festive season. By thinking about your financial goals now, it can put you in the right mindset about the choices you will make during the holidays.
How many of us take the time to set measurable and time-bound financial goals? I often hear people say their goal is to get out of debt, for example, but that same person is not clear about how much debt they actually have. They don’t know how much interest they are being charged on their debts, nor do they have a clear idea how they are going to rework their budget to pay extra money into their debt.
Financial goals must be S.M.A.R.T (specific, measurable, attainable, realistic and time-bound). In this way, the task ahead of you does not seem impossible.
I often ask my audience if they set financial success as part of their goals. This means working on better financial habits overall. Spend less than you earn, saving some money and enjoying what is left.
So, how do you give yourself a head start so that your overall finances improve in the year 2020? Here’s how:
- Review your 2019
Reviewing our money patterns can tell us a lot about our habits and how we handle money. It can show us our spending triggers and help us to avoid them in the future. This is the time to review all your statements, like your savings and investments, insurance, loans and other debts.
- Set specific goals
If, for example, you want to increase your net worth (assets – liabilities), you could say: I will pay down my debt by at least 40% by 31-11-2020 and I will achieve this by directing funds from my eating out budget to accelerate my goal. This goal is specific, time-bound and has an action plan on how you will go about achieving the goal.
Savings give us a sense of freedom. It starts with the belief that, no matter what comes your way, you will still be financially fit. That is why opening an account with the best bank to save money is important. For example, with MyWORLD, you can automate your savings through online banking by creating a debit order for your savings. This offers convenience and SA’s best interest rate on any positive bank balance.
The road to financial freedom can be a challenging one, but if you set goals that inspire you, you can achieve it.