Every year, countless people throughout Nigeria draw-up personal finance-related New Year Resolutions. Most of the goals are centred on saving more money, whether it’s by earning more or spending less. Regardless of the goal, most people fail because they overlook the most critical step in achieving their objective – a well thought out plan. Below are seven detailed adjustments that will help you reach your financial target and lead a more financially responsible 2020.
Track your spending
It’s easy to blow your budget when you have no idea where your money is going. Tracking how you spend allows you to identify where you need to cut back on, which makes it easier to limit unnecessary purchases. Remember, you can’t change what you can’t see and tracking your spending provides a visual of your spending and saving habits. You can track your spending the old-fashioned way in a Microsoft Excel chart or by using a budget-tracking app, such as YNAB, Mint or Pocket Guard. Most of the apps do all the work of categorising your expenses, providing spending reports and even sending alerts when you’re about to go over budget in a certain category.
Create goal-specific accounts
Instead of setting aside savings for all your goals in one account, you will feel more motivated to keep stashing away cash when you can visualise your progress toward your goal. Create separate savings accounts for each item, whether it’s for building a house, your kid’s education or something else. Then, automate your savings. This turns the act of saving to autopilot, so you no longer have to think about actually doing it. It also turns your savings into a regular monthly expense and helps reduce the urge to spend on other purchases that you don’t need. By automating your savings directly from your paycheck into a separate account, you won’t even be able to miss the money. Begin small at first and slowly increase those contributions.
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Take on a second job
There is only so much you can do to reduce monthly spending and free up extra funds to put toward your goals. If you want to save faster, taking on a side hustle can be highly effective. You can find many options online that you can do right from home, so the work doesn’t have to interfere with your day-to-day life.
Dodge shopping temptations
If you ever found yourself browsing the merchandise in-store or online for fun, you’ve probably found yourself buying things you don’t need and feeling buyer’s remorse afterwards. There are several things you can do to reduce these shopping temptations.
First, find activities to fill your time so you don’t browse when bored. Go for a walk or call a friend you haven’t spoken to in a while. Next, turn off push-notifications from the deal and retail apps on your phone that alert you to new merchandise or current sales that can be incredibly tempting.
Shop with a list
Whenever you are going shopping, go with a list and ensure to stick to the list. Avoid any temptation to go outside of that list. Also, ensure to shop in bulk, it will save some cost and time, which is priceless!
