One of the most overused financial quotes, albeit one I personally love by Robert Kiyosaki, “it is not about how much money you make; it is what you do with it.” And it couldn’t ring truer – Let’s use this quote as our financial resolution for 2020.
First, we need to plan what we are doing/going to do with our hard-earned cash? Become a budget buddy. If you want to take control of your money, your budget can help you pay off debt, stop you from making those unnecessary instant gratification purchases and enable you to invest in the long term. I cannot stress this enough; you need to see where your money goes every month! Plan, plan, plan – create a financial calendar. Either download a budget app/use Excel spreadsheet or a good old book. But keep track of those expenses. Every. Single. expense. Have you calculated how many take-away coffee’s you buy per week/month/year? 😉
Second step tackle your debts ASAP – so you have more money to save for your future self. Interest rate is either your friend or frenemy. If you invest and your money makes money babies, interest can be your bestie. But if you have a credit card/overdraft/personal loan etc the interest charged is not your friend. Look at the break down on your statements. If you do anything for yourself, please learn how debt works. You will realise it does not work in your favour – Basically, you are robbing from your future self. And unfortunately, we live in a time where instant gratification is King (eer Queen) and extreme consumerism is at its peak, which makes it difficult to ignore very attractive purchases. Start unsubscribing from those retailer emails, if you don’t see it, you won’t think about it. And soon you will stop buying stuff you don’t need. Know what you own and why you own it. Because all that clutter in your house use to be money and remember it is not a bargain, unless you need it. Goodbye sales! Should you want to make some extra cash, there are various marketplaces you can list and sell your items.
Step three, should you be so lucky or disciplined not to have any debt, I urge you to invest as soon as possible. And if you have any existing investments, increase the contributions. NOW. Also automate your savings, i.e. let your contributions be deducted via debit order or schedule an automatic payment. Pay yourself first. And never, ever withdraw from your retirement fund. Please. Only one in every six individuals can retire comfortably in South Africa.
Ps. Should you feel overwhelmed and you don’t know where to start, go register and view your credit profile at clearscore.com – I promise you it is worth putting in some effort to view your credit report.
Make money work for you – do something today your future self will thank you for, now, let’s start ticking these financial resolutions!