4 months to go until New Year's!
You probably kicked off the year with a do’s and don’ts list to better your life but sometimes things don’t always go as planned.
Whether things are going better or worse than expected, it's important to know if you're on the right track and if your goals are attainable.
We all have goals we want to achieve in life, but wishful thinking alone won’t get
you to achieve your goals. For the purposes of this article, we’re referring to having financial goals and monitoring them to help you stay focused and motivated about taking charge of your money.
That being stated, reflect on your initial goals for the year, noting what goals remain pending and what you have successfully done, how much you had when you established the goals and comparing them to your current financial status. That is, determine how much you have now and whether your budget can achieve the pending goals.
By doing so, you can assess how far you've come and how to stay on track before the end of the year. This way, whether your financial plans have gone off track or are on track, you can regain control of your finances and create a money plan that best aligns your goals with the total amount of money you have.
The best investment you’ll ever make is in yourself.
For instance, taking time to learn and improve your financial know-how, setting up a financial nest egg, budgeting, and monitoring your income and expenses.
So, if you haven't been investing in yourself, a good rule of thumb is to pay yourself first, by putting money aside for emergencies and investments, before paying anyone else or anything else.
Going forward, keep in mind that investing in your quality of life means being mindful. That is, being proactive about how you earn and spend. This sets you up for better financial outcomes and peace of mind.
Read Also: What Does Paying Yourself First Really Mean?
Over the first half of the year, there has been a significant shift in the economic and finance world due to the war in Ukraine. New tax laws in Kenya, and elections – lead to inflation, which put many Kenyans in a tight financial spot. And you might have resorted to taking a personal or business loan to survive.
There’s no shame in getting financial aid, however, you should do so responsibly.
Begin by identifying advantageous reasons to take out a loan, such as paying school fees, medical expenditures, and critical house repairs, rather than borrowing to go on vacation or purchase an unnecessary new gadget.
Once you've determined that you need financial aid, the next prudent step is to research how to efficiently manage and minimise that debt.
Before executing any debt repayment plan, outline and understand how much debt you have, overall. For example, money owed to colleagues, family, and friends; student loans, car payment loans, lipa pole-pole loans, overdrafts, and such.
For each existing debt listed: indicate the minimum payment amount, the interest rate, how much you owe, and what you have paid off.
Organise your debts in the order of how you want to pay them off. Consider these expert-recommended tactics:-
Option 1 - Pay off debts from the least amount to the highest amount, for debts with no interest charges.
Option 2 - List debts that incur interest charges from the highest to the lowest interest rates. Say, for example, you have a car payment loan, student loan, and a borrowed data bundle loan; prioritise your car loan repayment first, then your student repayment amount and the data bundle loan, last.
However, if the above options are not a fit for you, there are additional flexible debt repayment options to suit every financial situation and with your financial goals in mind. Additionally, working with a financial expert makes it easier to be and stay motivated about clearing your debts.
Start with the first debt on the list and work your way down.
Next, take note of how much money you have available, as well as the additional amount required to pay off each loan. This way, you can determine whether you have enough money in your budget to clear your debt, or whether you need an additional income source to efficiently follow through with your debt repayment plan.
What do I want to achieve with my finances in 2023?
What is my motivation?
Do I still want to be where I am in 2023?
What are my monthly goals for the coming year?
How can I keep improving my finances throughout 2023?
It's important to be anchored in your current financial condition while looking for ways to improve it.
By asking questions about your future, you give yourself the opportunity, to be honest with yourself, to dream big, if not bigger, and to create a flexible budget that can accommodate potential changes in your income and spending capacity.
Read Also: 10 Long-term Financial Goals to Start Today
Some of these questions may not resonate with you. But one question, a couple of questions, or all of them may have sparked ideas for defining a path for having your financial life match and complement your aims and beliefs.
Have you been asking yourself the right questions? Go ahead and do so.!