The new year is an opportune time to start fresh in every aspect of your life and this includes getting back on track with your financial health. Life is unpredictable and there may have circumstances which caused you to go off track with some of the financial goals you had set last year.
Therefore, as the world celebrates the start of a new year, Garvin Grandison, head of finance and regulatory reporting at JN Bank, is encouraging everyone to take some time to review their financial scorecard for the past year and look for ways to improve it.
He’s is reminding people that the key to maintaining financial resolutions is setting realistic goals and being deliberate in working towards achieving them. He also shared some actions that people can take to help improve their financial health this year.
- Calculate your net worth. The start of the new year is a good time to check up on how much you are worth financially. Knowing this is critical to assessing your financial health and securing a better future.
- Review your financial goals. Take a moment to look back at the resolutions you made for the past year and see which you were able to achieve or fell short on. This will help you to set new goals for the new year. Avoid setting goals that are no longer relevant to you and consider any changes in your life, such as salary raises or additional dependents, that can impact your situation. Remember circumstances will arise, so be sure to also give yourself enough flexibility where you can postpone a goal or set a new one to reach it quickly if necessary.
- Review expenses. Once you decide on your goals for the new year, you can begin estimating how much you need to set aside each month to realise those goals. Have a budget to ensure that your expenditure is not more than your income. Also categorise your expenses. You’ll need to identify your fixed expenses, which typically stay the same each month; your variable expenses, which change per month; and periodic expenses, which pop up occasionally. Having a better understanding of your expenses will help you to have better control over your income and you might find places where you can save more.
- Look over your budget regularly. Pay attention to your budget all year round. Consider using a budgeting app to help you track how well you’re doing. You may need to adjust your budget as things pop up but at least you will be aware of what’s happening with your life.
- Keep building your savings. You should be saving at least 10 per cent of your earnings. Having a healthy savings habit will put you in a good position in the long run, especially when you retire. Also check in on your emergency fund. If you used a portion of it last year, make it a top priority to replenish it as soon as possible. The more you can set aside is the more you will have as your safety net.