With the start of 2018, we’re we’ve all prepared our new year’s resolutions, which always seem to start with a sense of rejuvenation and determination. Well, good for you! If you need a fresh start, there is no better time than the present.
So besides shedding some weight and a new wardrobe, what financial resolutions are you lining up for the new year? Your money, after all, is an extension of yourself. How you approach it can go a long way in redefining 2018 and how it plays out, for good or bad.
So, here are five financial resolutions to help build a new financial you.
1) Be brave and set new short-term financial goals
Setting new financial targets is more than thinking about what you want. It should be an intensive session of financial introspection – with a determined attitude. What is it that you want to achieve in 2018? Do you want to be debt-free or do you want to go on a holiday? Whatever it is, figure it out and write down five financial goals for 2018.
Now you can figure out how much each cost, and when you will need the money in order to make them a reality. When that is done, rank the five options from most important to least important – be as realistic as possible.
Finally, be brave and remove the bottom two. For now, you should have 3 important short-term financial goals for 2018.
By the way – saving money should not be a financial goal itself (you’ll find out why in point 4). For now, your financial goals should be tangible targets that the act of saving money and wise-spending can help achieve.
2) Redo that budget!
Yes, you’ve heard it more than once; you’ve probably heard it more than a hundred times! But, never again will there be a better time to redo that long-forgotten budget, and for the sake of your financial sanity, never will there be a better time to stick to it.
Here’s our tip: Take your three financial goals and figure out how you will have to adjust your spending to achieve them. Remember, prioritise your necessities as always – such as monthly food, rent, car instalments, medical and other insurances, and of course, debt repayments. When they’re all in order, look to include your financial goals in such a way that they’re affordable and reachable.
Now, consider this again: Can you achieve all three financial goals in 2018? If you cannot realistically achieve all three, remove the least important of the goals and only accommodate those which are achievable in the calendar year, even if you only have one left.
Don’t worry about dropping these financial goals for now. We’ll put those aside for 2019. For the moment, to choose the most important and achievable in 2018.
3) Be disciplined – live by your budget!
There is nothing more important than being financially disciplined. Remember, it is a lot more difficult to achieve your goals – goals that you set for yourself when you were in a financially sober and determined space – if you cannot maintain the discipline and energy.
So, now that you have set yourself a budget to achieve your goals, live by it! Here’s a tip to help:
Set aside a morning every month where you consolidate your spending for the month past, and ready yourself for the month coming. Is your budget working? Are you spending as you anticipated? If it is becoming difficult to maintain, adjust it to ease the pressure. Don’t adjust it for the sake of it. Achieving financial goals takes sacrifice. Is the short term gain worth missing out on your set goals? Probably not.
Save, save and save some more!
Here it is: Saving should not be one of your financial goals, because saving itself should be written into any budget as standard. It should be considered a necessity. Even if it is just R100 a week to start, saving over a year or a period of years can go a long way, alleviating financial stress. An important thing to remember is that even your savings lose value as interest rises. Therefore, it is so important to stick to your goals. Do not be your own enemy – trust us, you’ll thank yourself later.
4) Set long-term goals. They’re the most important of the lot!
Long terms goals often seem impossible and so far away, but they are not to be forgotten. These goals might be saving for your child’s university fees in 18 years-time, or that Europe trip you’ve been thinking about for years. As long-term goals, they can be aspirational, brilliant, and often filled with sparkle. Much of the time, they should be the fuel that drives any budget forward.
Remember, long-term goals are only achievable if you allow your short-term spending habits to be packed with spending discipline. Trust us, being a spending disciplinarian is the best financial self you can be. As far as finances go, it’s all you’ll ever need to be. If you’ve planned well, the rest will fall into place.