We are two weeks into December, which means we are a few weeks away from the end of the year. A time where we look back and reflect on the trials and triumphs of the year, but it may also trigger a thought: what will you be doing differently for the upcoming year?
While there may be an array of starting points that can make the process a bit overwhelming, we have broken down the financial aspects to get you started.
Review the current state of affairs
There is no better time than now to review your current finances, how much and what you have been spending your money on, and what you can do to improve your savings account. Avoiding this first crucial step can lead to you repeating the same mistakes year after year, which can be frustrating. You can speak to a financial advisor to make the process less daunting. It can also help you have a financial plan that will be tailored to your finances without putting a strain on you.
Set up milestones you want to reach
As the saying goes "A goal without a plan is just a dream", it is crucial to have measurable goals in place. Set an achievable target that can be reviewed every month to track your progress. After all, it's the small steps that you take that bring you closer to the bigger goal. Use the SMART technique to help you navigate your way:
One thing we can all take away from 2020 is that not being financially prepared for whatever the future holds for us can be the final straw that causes everything to spiral out of control. While no one knows what the future holds, having a financial plan that secures your future along with your loved ones can make it less of a burden.
Consider investing in things such as life insurance, disability cover, income protection and emergency savings. Keep in mind to choose financial products that are affordable and easy to maintain over an extended period of time to avoid putting a financial strain on you.
Switch your money habits
Change doesn't happen overnight. Instead, you will have to consistently chip away at the bad money habits you have developed. But where do you start? Remember to work with what you have by creating healthy money habits. Practical steps you can put in place are:
Set up a budget. Split your budget into needs, wants and investments. You can use the 50-30-20 rule where 50% of your income can be used to cover your needs, 30% wants in the form of entertainment and items, and 20% going towards policies, savings and investments that grow your finances.
Use cash more frequently. It may be safer and convenient to use a card, but if you are frequently overspending, using cash for your day to day transactions can be useful. Always keep in mind to not keep large amounts on you.
Track your spending. A minute a day. That's all you need to go through what you have spent to see if you are still on track with your budget and financial goals.