When you reflect on your financial decisions in 2019, you may have some regrets. Maybe you incurred debt or didn’t put away as much as you intended for retirement. If that’s the case, you’re not alone. However, it is best if you make a strong start and not make the same financial mistakes you made in 2019.
Below are some smart money moves you can make to have a financially healthy and happy new year.
Putting money away for emergency
Putting away just N2,000 every month towards your emergency fund might seem so small, but in the long run, it accumulates.
Go automated to take the emotion out of it. Set up an automatic withdrawal into a savings account, contribute whatever amount you can afford, and after a few months, you’ll be surprised by what you’ve managed to put away.
Plan for the unexpected
In addition to making small contributions towards paying down debts and saving for the future, prioritize building an emergency fund. Ideally, you want to have money to cover three to six months of expenses in cash set aside in a checking, savings, or money market account.
Consider upcoming expenses and personal goals
If you look at your calendar for the year ahead, there are probably costs you can anticipate in advance. You can take an hour to figure out what unavoidable expenses you’ll be incurring in 2020. Even those fun events on your 2020 calendar can cost you. If you’re a bridesmaid or a groomsman, or if you’re attending a faraway wedding as a guest, for example, figure out how much you need to save over the course of the year to make those out-of-pocket costs sting a little less.
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In addition to saving for celebrating others, it’s okay to compartmentalise. Set aside funds for things you want to do.
The New Year is a “time to be honest with yourself. If you wished you had put away more in 2019, challenge yourself to put away a little more in 2020.
Challenging yourself doesn’t mean depriving yourself. I’m not telling you to sit in your house and be bored. Your social life is important. But when you go out to dinner, instead of ordering two drinks and two bowls of pepper soup, order one drink and one bowl of pepper soup. The money you save over time will add up.
Shifting your mindset around spending and saving can really help. Bear in mind that saving today might seem like you are giving up on so many things, but know that when you save today, you will have money to do what you enjoy today in the future.