If you are planning to put your best financial foot forward in the New Year, here are 10 important money goals we believe can help you.
- Start a budget: Few planning methods are as effective as a budget. It can make a lot difference to your personal financial dreams, depending on how committed and disciplined you are. Use a budget to plan your expenses for a period, and you will be able to eliminate unnecessary spending.
- Reduce debt: Taking loans may be a necessity for many people. For any reason, you may not be able to cut off debt completely, and you may not need to. However, you can also have a plan to reduce your debt portfolio in the New Year. Commit to paying off some loans in total.
- Open a savings account: Quite different from your everyday account, this account can be used to save money for your long term goals, regular expenses, a vacation, a car, a piece of land, or any other big expense you have your eyes on. A popular trick to managing a savings account effectively is to limit your access to it. That means no debit cards or online banking.
- Start an emergency fund: A leading personal finance expert in Nigeria disclosed the results of a poll on post-resignation finances. According to her, majority of the respondents (currently employed) indicated that if they were to lose their jobs today, they only have a month before running out of money. Commit to putting away at least 6 months’ worth of expense money, so that in case of an emergency, like an illness or job loss, you have a safety nest.
- Invest: If you have been sceptical of taking risks with your money, now is the time to let go of that fear. Investments may have certain levels of risk, but it is still the best way to growth your wealth. Find a suitable investment; mutual funds, treasury bills, stocks and bond, real estate, etc. with a level of risk acceptable to you.
- Learn about personal finance: It is important to take a deeper interest in your money, and how to manage it. Apart from reading blogs, there are articles and books that focus personal finance. A tip to not getting overwhelmed is to commit to learn about a concept at a time.
- Have a financial plan: A financial plan helps you make better decisions about your money. It is the whole process surrounding your finances, which can help you achieve your long term goals. Issues like having a will to protect your family after your death are part of the scope of a financial plan.
- Check your credit history: It is advised that you check your credit history at least once a year. This will help you monitor your loans, and keep your credit score in good shape. You can also sign up for an alert service that informs you whenever there is a change in your credit report.
- Get an insurance: This can be as simple as travel insurance, or more advanced like a life insurance. Either way, an insurance is a good way to protect yourself financially in case of unforeseen circumstances.
- Plan for retirement: If you are not yet of retirement age, the earliest time to start planning for it is now. You can match your employer’s pension contribution by committing to a voluntary contribution yourself. These little monthly deposits will definitely add up over the years.
What other money goals will you be making for the New Year? Join the conversation with us on Twitter (@CRCCreditBureau) and on Facebook (@CRCCreditBureau).