So 2017 is the year you get your finances in order, right? That sounds nice, unless it’s the same thing you said in 2016, and in 2015, and in 2014…
When it comes to managing your money well, you can’t just fail and then decide to try, try again. You need to learn from the money mistakes you made previously, and come up with a practical plan to avoid doing the same things this time. Here are some tips to help you do that:
1. Document your debt. If you owe money, write the names of your creditors down, every last one, where you can see it. Trust me, you need that clear reminder.
2. Your first big project is eliminating your debt. Scrutinise your spending and see where you can free up some money to start paying off your debts, in instalments if necessary. Start with the smaller debts.
3. Position yourself to earn more money. Whether it’s taking a course to increase your chances of getting a promotion, looking out for a better-paying job, or starting a side hustle, making a little more money is a great way to pay off your debts faster so you can get to the important business of saving and investing.
4. Dedicate a savings account without a debit card, or a kolo (wooden piggy bank), to building your savings over a specified period, so that you have a good sum to invest. While building this, find out about other accounts banks and financial houses offer where you can invest the little you currently have, at better interest rates than a regular savings account.
5. Keep track of all your investments and be sure to study your monthly statements. Educate yourself on the kinds of investment you have chosen, so that you know the right questions to ask, and what to look out for.
6. Get your insurance in order. We pray for good things to happen, but it’s an imperfect life still. Don’t be caught unawares.
7. Plan for your parents, especially if they’re aged. Sensitive discussions about health and death can be uncomfortable, but it’s better to have plans in place. Make arrangements for their wellbeing, help them invest their pension, sort out living arrangements if they can no longer live by themselves. Also, be honest about your financial situation and the assistance you can currently offer.
8. When you eventually find yourself in a good place, take note of all the things you did right. Amplify them.
9. Start your Christmas savings early so that you’re not under undue pressure, as is common at the end of the year.
10. As much as you would like a vacation, be honest about what you can afford. You don’t want to blow all you’ve scrimped and saved to accomplish all year on one vacation, only to end up back at square one. If you don’t have the funds for travel and hotels, consider planning a staycation instead.
11. Don’t squander your thirteenth month or any other bonuses. Sure, you can treat yourself a bit, but lump sums like this are better channelled towards goals like becoming debt free, getting a certification, or investing in a new business; something memorable that will keep yielding returns.
12. Spend wisely in December. You don’t need to buy gifts for everyone. In fact, those who love you will be happy to see you out of debt and making progress financially. The people who matter won’t mind if all they get from you is a Christmas card. For the gifts you absolutely have to buy, start early before prices shoot up, as they are wont to during the holidays.
Of course, all of this will require you to embrace frugality, but you’ll be so pleased with your progress by the end of 2017, you’ll agree it was worth it.