Michael Andre Collins, ambassador for the JN Foundation’s BeWi$e financial empowerment programme, says it’s important for persons to review and reset their personal financial goals for the New Year.
“This is important, because it helps to give perspective and provides you with a focus for the year to come,” he said.
Mr Collins, who is also Manager of JN Bank’s Youth Banking Unit, added that while the days leading up to New Year’s Eve are often spent reflecting on the year gone by, the following days should be spent reflecting on the New Year, reviewing your financial record for the past year, and then looking for ways to improve it.
Here are some financial changes that you should resolve to make in the year to come.
Calculate Your Net Worth
If you haven’t already done so, the New Year is as good a time as any to determine what you’re worth financially. Calculating your net worth is a key step in assessing your financial health and reaching your financial goals.
The resolutions that you need to make will become more obvious after making this calculation. Looking closely at all your assets and liabilities helps to create a clear picture of where you are prioritising your current spending and saving and where you need to make changes in those habits.
Make Saving Automatic
To help you reach your goals, be sure to transfer amounts earmarked for savings from your chequing account to a designated separate savings or investment account, or better yet, have a set amount from your pay cheque auto deposited into savings. That will make it less tempting for you to spend the money that you have managed to set aside.
Pay Down Debts
Take a few minutes now to reset how much you plan to pay on your personal loans, debts, and home mortgage accounts. If you haven’t already paid off your mortgage, consider paying some extra principal toward your mortgage payment each month.
If you owe money on your credit cards, determine how much you can realistically afford to pay off during the year. For best results, try not to charge additional purchases on those cards while you’re trying to pay down what you owe. If you have high-interest credit card balances, consider whether it would be more beneficial to pay off those high-interest debts or add to your savings.
Review Your Credit Report
Make sure that you check your credit report regularly and take steps to repair any negative aspects. Now that you’re entitled to a free credit report each year, there is no excuse for you not to review your most important financial reports, especially since errors in these reports are not uncommon.
How Do You Maintain Financial Resolutions?
The key is to set realistic targets and remind yourself why you made the resolution when you’re tempted to give up. He noted that these tips are relevant to both the young and older adults, adding that seniors should make it their point of duty to encourage their children and grandchildren to adopt useful money management habits earlier in life. “One of the things we notice is that persons are waiting too long to get serious about their finances, especially when it comes to saving for retirement,” Mr Collins said.
