The complex nature of our nation’s turbulent economy has
impacted all Nigerians and leaves many feeling confused and anxious. The good
news is that no matter how challenging things may be, the basic fundamentals of
personal financial management still apply so stay focused on this.
Have you made your New Year Resolutions? Did you
include any financial ones? All major life events such as getting married,
having a baby, educating children, losing a job, getting divorced, buying a
home, losing a loved one, planning for your retirement and your estate come
with financial consequences that must be prepared for. Here are 12
resolutions to consider for 2019. Don't try to tackle them all. Tackling just 3
or 4 will lead to significant improvement in your financial life.
Establish a budget
Living as though nothing has changed during challenging
times can make a situation worse; changing your spending habits must be a priority.
Budgeting is one of the most important tools for financial security. A good budget will help you
to plan and monitor your expenses so you can identify where to cut back if
necessary. Where does your money go? The traditional suspects are eating out
every day, recharge cards etc. Can you cut back a little on these?
Build an emergency fund
An emergency fund is a must-have, particularly during
times of financial challenge. Build a fund with at least six months' worth of your
expenses in an
accessible, interest bearing account. If you are suddenly faced with unemployment,
medical expenses, or other unexpected events, you will have this financial
cushion to fall back on. If you can’t build 6 months, focus on 3 months. The
key is to have something saved.
Can you set aside a minimum of ten per cent of your monthly income
for savings. One of the most effective ways to increase savings is to automate the
process by having the funds deducted via a direct debit into a savings, money
market or mutual fund account. If the funds are in an account attached to your
debit card you may be tempted to dip into the funds.
Reduce your debt
Getting out of debt or at least reducing it is another
key step to taking control of your finances. List all your debt, and prioritize
by focusing on the debt with the highest interest rates first. Are you one of
those people that avoid your lenders? Have you stopped taking their calls or
ignore their reminders? You need friends and family as a lifeline when things
are really bad so if you damage relationships, it only comes back to haunt you.
If your debt has become overwhelming, contact your creditors to discuss the
possibility of coming up with more palatable repayment arrangements.
5. Invest for the future
If you have some savings and your debt is under
control, consider investing in the stock market. It is important to remember
that the stock market over the long-term has outperformed other asset classes. Many stocks are
currently selling well below their true value. If you are fortunate enough to
have cash for long term investing, this is a good time to seek professional
advice to build a diversified portfolio. Remember that investing comes with
risk; to mitigate this, you should diversify across the primary asset classes.
Improve your Health
A heathier lifestyle means fewer medical expenses. If
you are healthy, you will have brighter prospects in all aspects of your life. Do
you need to lose weight, eat more healthily, or exercise more regularly? Take
your health seriously and take concrete steps to improve it. Make this a way of
life for your family to ensure that your spouse and children are healthy.
7. Invest in
There is something everyone of us can do to earn extra
income and it is time to find out what that is. What can you do outside your
full time job? If you are unemployed, this becomes even more urgent. Have you
considered tutoring, consulting, blogging, photography? Identify and nurture
your passion and talent and begin to leverage on it to earn in 2019.
8. Protect yourself
and your Assets with Insurance
You are your greatest asset. Do you have adequate
cover for your health and your life, particularly if you are the primary breadwinner?
Are your properties including your car and home adequately insured? Things
happen and you cannot afford to be careless with insurance. In addition, do keep up with routine
maintenance of your assets so that you can identify festering problems before
they require expensive repairs. The odd noise coming from your car engine
should not be ignored. Attend to issues early.
Most Nigerians do not have enough money saved by the
time they face retirement. Most
of your retirement income will have to come from money you set aside and invest
today whilst you are still young and earning. Do you have a Retirement Savings
Account? Make this an important part of your long-term plans.
10. Put an Estate Plan in pPlace
No one wants to think about death at the start of a
new year, but you owe it to your family to put something in place should
something untoward happen to you. Make an appointment with an estate-planning
attorney who will put you through a relatively simple process. If you already have a will, review and update it to
make sure you have included any new assets or beneficiaries.
Build Philanthropy into your Plans
In spite of how difficult things might be for you,
there are always people worse off. Philanthropy is a powerful and effective way
to change lives. Determine your area of interest and identify ways in which you
can make a positive impact.
12. It’s not all About Money
It is important to note that the most
fulfilling things in life have little to do with money. They have to do
with relationships; with your partner, your spouse, your children, your
siblings, your parents, your friends. Remember to count your blessings in 2019.
Enjoy your Life and may God grant you good health, happiness, and peace this
year and beyond. Happy New Year!
for Financial Resolutions in 2019 at www.moneymatterswithnimi.com/financial-resolutions-2019/
Akinkugbe has extensive experience in private wealth management. She seeks
to empower people regarding their finances and offers frank, practical insights
to create a greater awareness and understanding of personal finance.
personal finance tips, contact Nimi: