The festive season is now over and with it several lessons learned from the year that was. If we have apprehended these lessons, then it means setting better goals for 2022.
With another Covid wave surging now bringing a feeling of uncertainty, the opening of the economy comes with hope for better days ahead. With this in mind, it might be a great time to make some money resolutions from the financial lessons from the last two years. Perhaps 2022 would be a great time for you to have a fresh start.
We cannot control what happens especially now with the pandemic around and with an economic recovery that is complex. Planning financially for 2022 is the start of taking control and being ready. Here are a few resolutions you can make for 2022.
A lot of people have had to dig into their savings accounts to cover extra costs this Christmas or cover up income loss during the pandemic. Because of this, people have seen the essence of building up their savings. You can accomplish that by limiting the total cash you spend on non-essential items.
Another way is by finding a side gig in addition to your main job. The extra income you will get won't be budgeted for the existing bills, so you will be in a good position to save most of that money.
Following a budget is one of the best ways to materialize your savings goals. If you're in control of your spending, you will be less prone to extensively use up your earnings. Moreover, you will reduce your chances of getting into debt. If you are uncertain how to start, check out our article on budgeting
Most events were stopped, if not all, when COVID became so widespread. But things are now looking up and our favourite joints have opened again to the public. Go get that experience you have always desired to have. Be it Bungee jumping, sky diving, going scuba diving, or climbing a mountain. Set aside some money, starting this Christmas that will be for that new experience.
This Christmas will come with a lot of spending. But do not forget you have bills to pay when January comes, including fees for when kids go back to school.
It may be your utilities or a service that is being accorded which you have to pay for. It avoids any extra charges that come with late payments not forgetting the inconvenience of having those services cut off.
If there is something we’ve been taught strongly is that life can turn on you in an instant and that it is critical to be ready for any financial surprises. For this reason, it's deemed important to create an emergency fund with sufficient money to cover you for at least three to six months of basic living expenses. If you don’t have an emergency savings account, it definitely pays to get one.
This basically means that you pay your “future” self money. It is crucial because if you do not do it, chances are you might not have anything for yourself.
“One good way you can do this is by contributing monthly to your retirement scheme. It is even best if your employer offers matching contributions,” says Javan Omolo, a financial advisor.
“It is prudent to set a goal of putting at least 10% of your income for your future needs like retirement every month,” he says.
Another way to pay yourself first every month is to put money into an emergency fund or a savings account before paying for other expenses.\
Investments go hand in hand with the “pay yourself first” idea I have been talking about.
“I have planned to start investing some money every month and I will stick to this plan for the rest of the year and see how it will turn out for me afterward,” says Jacob Wafula, a resident of Utawala and teacher at Blissful Bright Kindergarten School.
It is advisable to invest with a long-term mindset.
An example of an area you can invest in I the stock markets. Do not try to time the markets. They are very unpredictable. Follow the historical returns of the markets. Be disciplined while at it and you will attain your goals.
You should come up with a plan to reduce your large debts especially if you are 30 and above. It is very important to reduce what you owe even it will involve you making some financial sacrifices to accomplish this.
If it isn’t possible at the moment to get rid of the debts completely then try to minimize the balance. For you to enjoy your financial freedom, it’s imperative to have control over your debts, no matter what the reason is for borrowing the money.
Among the resolutions people make for the new year, financial resolutions are the most common ones. I hope the tips I have discussed will help you set and keep your financial goals for 2022 and beyond. If you have a Personal financial advisor, ensure you have shared the resolutions you have made with them. Whatever resolutions you make, choose realistic, attainable goals with a bigger picture in the long term.