It’s that familiar time of year when you envision a “new you” and foster a compelling motivation for self-improvement. However, the year always seems to form into an uphill race and once you return to the daily grind it becomes easier to allow yourself to slip-up in your devotions.
Reflecting on areas where you have encountered difficulties in the past helps to forge a firmer future. Here are five of my 10 financial reflections for 2016:
There’s little point in paying off your debts if you keep making new ones
Just because you have a job and qualify for a massive overdraft or credit card limit doesn’t mean you must use it. Also be sure to open all of your statements. Query charges and debit orders if you don’t understand what they are, you need to know what’s going on in your accounts.
Accept that you aren’t entitled to a certain standard of living
People like to make assumptions about what they deserve in life. It may be due to their qualifications, how they grew up or purely because of what they have become accustomed to. There is a general opinion that South Africa is in for a difficult year, don’t make harsh sacrifices to maintain your comfort zone. Adjust your lifestyle to match your income and encourage yourself to be grateful every day.
An allowance will help your kids appreciate their finances
If kids come and ask you every time they want something, your life becomes a permanent financial tug-of-war. Give them a reasonable fixed allowance that will cover their expenses. That way you can budget more carefully; and so can they.
They get to learn what’s important to them and how they want to spend their money. Stand firm with this and if they can’t afford it, they will learn to save and wait.
Stick to a budget that is realistic
You will most likely have to adjust your budget as the year progresses; prices increase and new expenses will be added to the list. Keep a record of what you spend and review it at the end of each month, looking for areas where you could be spending less.
An emergency saving fund will spare you a lot of anxiety
It can be difficult to get together, but even one month’s salary can make a huge difference in an emergency. If your cell phone gets stolen or you need to visit a sick relative this squirrel fund will ease your stresses and allow you to focus on the problem at hand.
Be sure to check back next week for Another 5 Financial Reflections for 2016.
In need of financial advice? I can help you out. Let’s get in touch!