Managing your personal finances can feel like a full-time job and it often leads to an overwhelming effect and as your life continues to get busier, it gets more difficult to plan.
To help keep your personal finances on track, we’ve compiled an annual to-do list for all of those activities that are best tackled early in the new year every year. So like spring cleaning, let’s make the early months of every year personal finance planning season. Here are a few of them;
Review the past year- One of the things to do this year is to take an assessment on your current financial situation. Take a look at the goals you set for the previous year, take note of those that were fulfilled and those left unattended to. Assess all that you own. Write down all your assets and current investments if any. Also take notes of all your debts and when the payment will be due. The debts with the highest interest rates should be paid first.
Set goals– It is important to begin the New Year with a clear cut financial plan which will regulate your spending. It is easier to keep it very direct and simple. For this reason, it is advisable that the goal is SMART- i.e. specific + Measurable + Adjustable + Realistic + Time-based. These qualities make it easier in attaining your financial goals as it makes you accountable to them. Don’t forget to set personal goals too.
Invest– Investing in viable opportunities or start-ups should be on everyone’s list this year. To create wealth in the long-term, investing with discipline and determination is the key. Hence, there’s a need to save and invest regularly to meet your financial goals. Investing small amounts consistently will also prove to be light on your wallet and reduce the burden of investing a huge sum at one go. It is not mandatory to compromise on your current lifestyle or reduce your standard of living all at once, but, you can bring small changes in your current spending habits and save more.
Save More and Stick to Budget– This point is self-explanatory. Part of your financial plan for the year should be to save more, avoid deviating from your budget.
Start planning your retirement– It is never too early to secure one’s future as the number one rule of saving money is to ‘pay yourself first’. It is a prudent practice to set aside a percentage of one’s income towards savings before using the money for other things, including paying bills. The rule of thumb is to save at least 10% of your income, towards your retirement. If you have an existing plan, it would be ideal to increase it even if it’s only by 1 or 2%. Visit www.sigmapensions.com for more info.
