Sticking to those financial resolutions in the New Year

Sticking to those financial resolutions in the New YearOn New Year’s eve, particularly after a few drinks, we make promises to ourselves that we have every intention of keeping. But time and again we fall short of sticking to these resolutions and just a few short weeks later, they’re forgotten. This is true when it comes to dieting, exercising, and particularly our finances.

“Most people aim to get on top of their finances or save more at the beginning of the year, but come February, these well-intentioned resolutions have been long forgotten,” says Kosie Jansen van Rensburg, co-founder of life insurance company Hero Life.

“There are practical ways however that you can see your goals through, and end the year feeling financially fitter, and with your resolutions ticked off,” he says.

If you’ve promised yourself that you’ll start saving or get out of debt, here are some realistic tips that can help you stick to those resolutions.

Sticking to a budget

One of the richest men in the world, Warren Buffett, said the following: “Do not save what is left after spending, instead spend what is left after saving.” What this means is that it’s better to save some money first before paying everybody else (this includes your creditors), but most of us don’t follow this mantra. We’re not talking a huge amount here – it needs to be an affordable amount. But after we’ve paid our creditors we’re less inclined to save anything that’s left,  and we spend it instead. Hence the advice is to ‘pay yourself first’.

Jansen van Rensburg adds: “Budgeting also removes financial anxieties by allowing you to know exactly how much money is coming in and how much money is going out, and also exactly where the money is going. This helps you to feel in control, and being in control of your money means you are more in control of your life.

Getting a grip on your debt

Debt is one of the hardest things to cope with. But dealing with it is a worthwhile pledge to make. “Understand exactly what you owe and design a plan to be able to pay it off as quickly as possible. Start with the debt with the highest interest since that is costing you the most every month. Once that is paid, move onto the next debt and so on until you have settled all your debt,” says Tanya Haffern, wealth coach and author.

Taking care of your loved ones

Review your will. This is particularly important if your circumstances have changed. If you’ve recently got married, had a child or taken out a home loan you need to reassess your finances and decide who you want to leave your wealth to. If you don’t have the money to get a professional to look at it, find out when National Wills Week is in 2019 – it generally falls in September and mark it in your calendar so you can consult an expert for free.

“Also check your insurance:  do you have appropriate cover? Have your circumstances changed and do you need to adjust your life, house and car insurance, as well as medical aid?  Adjust these if necessary,” advises Jansen van Rensburg.

Keeping your expenses down

Things have gotten expensive but cutting back is one of the easiest financial resolutions you can make. “And if this sounds like too much work, there are a number of useful apps that will streamline this for you – look at your banking app for example as this will be integrated with your account for easy monitoring. An app will also give you a nudge on where to cut spending and where to save,” points out Jansen van Rensburg.

Upping your financial knowledge

If you’ve always been ignorant about your finances and how to improve them, why not resolve to educate yourself in 2019. “Read a financial book every quarter. The more you learn, the more you earn. Make sure you invest in your education and grow your skill set. You need to know exactly how to make your hard-earned money grow and education will unlock that potential in your mind,” says Haffern.

Cutting down your bond

A home loan is probably one of the biggest debts we have and paying off that debt more quickly will mean huge savings in the future. Again, be realistic about what extra money you can put into your bond. If you aim too high, you could struggle, get despondent and then give up. “The faster you pay off your bond, the sooner you own that asset and that will enable you to leverage your income to diversify your property portfolio by acquiring more, or to build up an emergency fund in your bond account. As little as R500 a month extra could shorten your bond period by a couple of years,” recommends Elmarie Bester, principal at Leapfrog Faerie Glen.

Maintaining your assets

It’s important to service your car, particularly if it’s your prime mode of transport. If you don’t service it regularly it’s bound to cost you more in the long run. It’s not only cars that need maintaining but properties too. Property maintenance has a direct impact on property value and growth, points out Bester. “A well-maintained property always fetches a higher price in the market because of its appealing presence,” Bester says.

But this doesn’t mean you have to transform yourself into a master builder. Maintain and fix things when they break, replace fittings that are old or outdated, paint the interior and exterior every couple of years, look after the garden and make sure the plumbing and electrics are in safe working order.

“Property maintenance becomes easier, and more ‘natural’, when you adopt a house-proud mindset. Tell yourself that the little things become the deciding factors on value later on,” Bester suggests.

This article first appeared in City Press.

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