Many people set New Year resolutions for January. Some people aspire to lose weight, to exercise on a regular basis, to eat healthier, to spend more time with their loved ones or to start a new business. We all have more energy, new ideas and new goals at the beginning of a new year. January is also the perfect time to get your personal finances in order. Definitely a resolution that you want to turn into reality, because it will create financial security and stability for you and your family.
Your financial wellness also has a direct impact on your physical and emotional wellbeing. Reducing financial stress will benefit your health, help you to sleep better, create a positive mind-set, and help you feel happier and more satisfied with your life in general
This is a checklist that will help you to get your personal finances in order:
- Compile a monthly budget for the year ahead. If you already have a budget, ensure you update it for annual increases, new expenses and inflation. Most importantly keep to your budget as a budget provides the foundation layer to create financial stability and wealth.
- Analyse your actual expenses for the last three months and identify expenses that you can reduce or cut out completely.
- Review your retirement savings and update it for any increases in living costs.
- Ensure that your will is signed and up to date.
- Review your life, disability, dread disease, income protection and funeral policies to ensure they still cover your needs.
- Update your short-term insurance policy by adding any expensive gifts you received or new items / house improvements you added during the previous year.
- Review your debt, the interest rates and repayment periods and compile a plan to repay your short-term debt (credit cards, overdrafts, personal loans and clothing accounts) as soon as possible.
- Ensure you have an emergency fund in place to cover any unforeseen events happening.
- Think about how you can create one additional income source this year. Maybe start a business on the side, rent out a vacant room in your house or buy an additional property. Then implement your idea.
- Allocate any excess funds you have available at the end of the month to repay your bond quicker.
The checklist might seem easier than it will be to actually implement it, but with the necessary discipline and dedication you can implement these 10 items. It certainly will have a positive impact on your financial wellbeing and give you peace of mind that your finances are in order, or that you have started taking action to get your finances in order.
You are responsible for your financial wellbeing. The better you plan and the action steps you implement will determine your financial success. Make this year the year that counts. Good luck with implementing this checklist. I wish you a successful financial journey.
Written by: Ronel Jooste