Personal finance check-in: Financial goals vs. New year's resolutions

05-06-24 / Sisanda Ndlovu

Personal finance check-in: Financial goals vs. New year's resolutions

Cape Town - According to Thabo Qoako, Consumer Financial Education Specialist at Momentum Metropolitan, there is value in using a proactive approach to manage personal financial goals rather than waiting until the end of the year to figure out where you went wrong with managing your finances.

That proactive approach is revisiting your budget often, which helps keep your spending habits in check and empowers you to rethink your spending plan if you have new financial goals, if salaries and expenses have changed, or you experienced surprise costs.

"Regularly revisiting personal financial goals, you set out to achieve at the beginning of the year makes sense in order to best evaluate your spending habits and to ensure that you maintain a healthy bank account," Qoako added. "Some people believe in new year's resolutions and with it a habit-forming change to support their new mindset for the year. Others understand that change is always required no matter what time of the year, as change happens when we are ready for the change."

Getting to the root of an issue helps provide insight into the reasons why we have negative spending habits. Hence, the importance of a mid-year check in. This helps you adjust where needed to finish the year strong as opposed to examining what went wrong at the end of the annum.

Just in case you missed the boat or, need help to better your spending, here are a few handy hints to help you on your way to financial wellness Be aware of debits going off: check your bank statements often to ensure that you are familiar with the transactions you have approved. Get in touch with your bank immediately if you notice anything suspicious.
Create and stick to your budget: outline your income and expenses to best understand where your money goes. This helps you prioritise essential spending, identify areas to cut back, and ensure you're saving regularly.
Build an emergency fund: save three to six months' worth of living expenses in a readily accessible account. This fund provides a financial cushion in case of unexpected events like job loss or medical emergencies which may not be covered by your medical aid.
Reduce and manage debt: focus on paying down high-interest debt first, such as credit card balances. Consider strategies like the debt snowball or debt avalanche methods to systematically reduce your debt load.
Invest for the future: start investing early to take advantage of compound interest.

Ask for help: financial advisors are a wealth of information. Don't be afraid to reach out to a reputable one for advice. "Financial struggles require a growth mindset. This exercise reflects on one's financial journey, highlighting achievements and noting areas which require improvement. If you did not achieve what you set out to do at the mid-year point, don't despair, there is still time to pivot by year-end! So, forgive yourself and try again," he said.