10 Financial New Year’s resolutions for 2017
The end of 2016 is upon us and whether or not your finances are up to scratch, it’s still necessary that you review your assets and find ways to improve your current financial status in the New Year. Unfortunately many of us struggle to achieve our well-intended goals as we often set unrealistic targets or are sometimes wasteful when money is in hand. Alina Hardcastle chats to experts about 10 financial New Year’s resolutions we should consider in order to become financially healthy.
- Get rid of your debt
First thing first, clear your debt. Nedbank says that getting out of debt is a key step to taking control of your finances. “By really focusing on getting out of debt you can reduce the amount you pay in interest, and have money available to put away in a savings account each month.”
1Life Insurance advises that you pay off your highest interest accounts first, or even if you are lucky enough to get a bonus, use this to clear some or all of your debt. Make sure you don’t get into any further debt over December. The only way to do this is to pay back more than the minimum instalment and to avoid dipping back into that particular line of credit.
- Start saving your money
Saving is another important key to financial success. Nedbank explains that saving can be more effective if you have a goal or target that you’re aiming towards. “Remember to maintain an emergency fund, and consider even getting together with friends to a form a Stokvel or investment club to help motivate you.” Saving is a habit not a skill.
- Change your spending habits
Preenay Sathu, channel head at FNB Financial Advisory, explains that a change in financial behaviour goes a long way. “By being more conscious of your spending habits you will be in a better position to make changes where necessary and avoid making the same mistakes. “Make a list of items that are not a priority for you but still dent your wallet. This might require you to downgrade on the type of vehicle you currently drive in order to allocate additional funds towards your retirement or saving goals.
- Avoid impulse buying
It’s also important not to shop on impulse. Draw up a proper list before you head off to start grocery shopping and keep this list on you to ensure that you only purchase what is necessary so that you stick within your budget. 1Life Insurance says: “If you draft a list of all your necessities and do some research on the best price you should pay, it will provide more clarity of how much money you will need to budget for the rest of the holiday.”
- Get a second income
Is your current job not bringing in enough cash to accommodate your basic needs? Nedbank suggests finding a hobby or ways you can use your skills to make a second income. This could potentially lighten any financial burdens you may have but make sure that you set a realistic start goal e.g. aim to earn an additional R200 a month.
- Reassess your retirement contributions and savings
As we get closer to our golden years it’s important to take time and revise your retirement plan. FNB says: “Review your retirement plan, contributions to your retirement fund and other associated savings as it becomes much more critical as we move closer to the golden years.” Chat with your financial advisers and found out if your annual premium increase is in place and that it’s sufficient to meet your retirement goals.
- Make use of loyalty and reward points
Don’t just let you loyalty cards lie around in your bag. Nedbank says that you can make big savings by using your rewards or points card from a store or a bank.
- Stick to cash payments
Ditch your credit card and pay with cash. 1Life Insurance explains that by doing this you will become aware of how much you’re actually spending. “People have an emotional attachment to cash and generally find it more difficult to part with than simply swiping a debit or credit card.
- Ensure your estate is in order
Review your will and ensure it serves the best interest of your dependents and protects your assets. It is important to remember that an estate that is well planned and articulated through your will be quicker to execute and not be subjected to unnecessary delays.
- Invest your money
Once your debt is out of the way and you’ve accumulated a substantial amount of money into your savings account, start investing. Nedbank says: “Investing allows you to grow your money by means of higher returns.” You need to be aware that there are risks involved in this. It’s important to be sure that you are ready to invest; you should seek assistance from a financial planner or adviser.