In a matter of weeks, another new year will begin. Like every New Year, individuals usually harbour new hopes and aspirations to achieve more than they did the year before. Among the most pursued goals during this time is the desire to increase income and to effectively manage funds in order to achieve personal financial goals. However, the scarcity of money presents some challenges.
Despite these financial obstacles, there are people who continue to make the best of their financial situation. Keeping in the spirit of ‘giving’, my New Year gift to you is sharing tips I have used over the years to remain afloat:
1.Do an annual financial plan:
It may seem like a lot of work to budget for an entire year but in the end, it will be worth it. An annual budget gives you a bird’s eye view of your income and expenditure for the year. It also provides a good opportunity to plan for the big spending moments, such as back-to-school, car insurance payments, servicing and travelling etc. Your financial plan should also help you to live within your income.
2.Be a financial disciplinarian:
Unscheduled spending such as doctor’s visits and other emergencies can throw you off track, nevertheless it’s crucial to be a financial disciplinarian and stick to your budget. It is advisable when making a budget to allow for contingencies, which is where your emergency spending may be included. Try to eliminate impulsive buying and if you earn a little more than you usually do, incorporate it into your savings or some other investment plan.
3.Take steps to reduce your debt:
You may be thinking, ‘what place does this have in my financial plan?’ But if you are hoarding money and have debtors calling you, you should be in a very uncomfortable space. One of the main purposes of doing a financial plan is to ensure you manage your funds effectively and debt should be something you plan to eliminate. Bear in mind, high debt or non-payment of debt affects your personal credit rating and with the introduction of the credit bureau, this will affect your ability to qualify for credit in the future.
To continue reading, Purchase Vol. 8 Issue #3 2015.