A new year brings with it a sense of
renewal and the age-old tradition of new-year
resolutions helps you to focus on making positive changes in various aspects of
your life. Many people make new-year resolutions
to exercise regularly and maintain a healthier lifestyle, to be more prayerful,
to be a better mother, father, sister or friend; they are often already
abandoned before the end of January!
resolution that is often ignored is to put your personal finances on the front
burner. Try to initiate a few of these financial new-year resolutions in 2018;
limit yourself to about three or four so that you don't get overwhelmed and you
can actually build on them.
An annual review is
necessary because finances are dynamic; needs and goals change, family
situations change, jobs change, incomes increase, children are born, others are
off to college. Do you have a
clear picture of where you stand financially? Start by gathering and organizing your
paperwork: bank statements, investment certificates, insurance policies, title
deeds, your will, and other financial documents.
is your networth?
To determine your
networth, list and add up all your assets, that is, what you own including cash, mutual
funds, savings and investment accounts, valuable personal possessions and the
value of your home and subtract your liabilities or what you owe,
such as your
mortgage, car loans and other debt.
your debts exceed your assets, do not despair; that is the purpose of the exercise;
you need to make adjustments. Keeping track of your
net worth is a good indicator of how effectively you are managing your money
Have you set
Have you set short, medium and
long-term financial goals? Are they still appropriate
for your current situation? Your short-term financial
goals could include saving for a car, or a vacation whilst medium and long-term
goals might be making a down payment on a new home in three years, or planning
for retirement in 10 years. If you are planning a family or have
very young children, an education fund to cover college or university fees
should be a priority. Setting clear goals brings you closer to achieving them.
Don't ignore your debt
needs attention. Getting out of debt is another key step to taking control of
your finances. List all
your debt, and prioritize by focusing on the most expensive debt with the
highest interest rates first. Having your debt under control gives you more
freedom to do other things. It will take
some sacrifice, but it is well worth the effort.
Create a budget. Once you
know what you owe, a budget will help you deal with your debt systematically. Budgeting is one of the most important tools for
financial security and planning
could mean the difference between achieving financial freedom and experiencing
financial failure. A good budget will help
you to plan and monitor your expenses, so you can identify where your money
goes and where to cut back if necessary. Create a budget, and more importantly,
try to stick to it.
Improve your knowledge of
money matters through books, magazines, newspapers, seminars, and by seeking
professional advice. Whether your interest is in learning how to manage your
money, how to get out of debt or how to plan for your children’s education,
there is a plethora of information that will guide you and put you in control
of your finances, bringing you closer to financial security.
If you don't already have
an emergency fund, think seriously about building one. Try to have at least
three to six months' worth of living expenses in a safe, accessible, interest
bearing money market account.
If you are suddenly faced with unexpected job loss, major car repairs, or
medical expenses, you will be better prepared to cope if you have this
financial cushion to fall back on.
critical to financial success. Try to develop a strict habit of setting aside a minimum of
ten percent of your income each month for savings or investment purposes. You
will be surprised to discover that over time, even small amounts add up. Don’t wait until all your other commitments have been met; pay
yourself first by automating your savings. Put a direct debit in place so that
you won’t be tempted to spend all your
Invest for the future
Make it a priority in 2018 to invest
for the future. Don't ignore the stock market; inspite of inevitable market volatility, continue
to invest in the stock market particularly where you have a long timeframe,
such as for your children’s education or for your retirement. However, do pay
attention to your asset allocation and ensure that you are well diversified
across the primary asset classes including cash, bonds, stocks, real estate and
other interesting business opportunities.
Can you afford to retire?
your retirement nest egg growing? Every single year counts; Most of your retirement income will have to come from the money
you set aside and invest today. If you haven't done so already, open a retirement
savings account and in addition, start to build an investment portfolio.
Do you have an estate plan?
I know it
sounds like a morbid way to start the New Year, but do you have a will or a
living trust? Putting your last wishes down in writing should be a top
priority, particularly if you have dependants. Knowing your
children will be cared and provided for should anything happen to you, will
give you a huge sense of relief. If you already have a will, it is a good time
to review and update it to make sure you have included any recently acquired
assets or new beneficiaries.
Build giving into your 2018
Giving is a
powerful and effective way to change people’s lives for the better whilst at
the same time giving you financial freedom. Determine a cause, initiative, or
charity that you would like to be involved with and identify ways in which you
can make an impact.
not all about money
last bit of advice: In all these money matters, do remember that the best
and most fulfilling things in life have nothing to do with money.
Remember to count your blessings, not just your money! May God grant you good
health, happiness, wisdom, security and peace in abundance in the year 2018 and