By Charndré Emma Kippie
It has been a turbulent past two years – this is undeniable! With the outbreak of COVID-19 in 2019, we have all faced a rather unusual, taxing time. For many individuals, these circumstances have thrown a significant load of stress on mental and physical health, and financial well-being. As we transition into a brand new year all together, now is the time to grab a moment to reflect on the lessons learned — now is the time to claim your financial success.
As you reflect on the last two years remember to zoom in on the actions and behaviours, affecting your financial affairs, that you can actually change and control. Focusing on what is out of your control will only cause you more stress and distraction.
Ask yourself if you have a good financial plan. Are you on track for long-term financial stability? Then, pinpoint the things you can actively work towards changing and implementing in the new year. Think of this exercise as setting your financial goals for 2022.
Getting Financially Fit for 2022
As you go through this process of setting your financial goals for the year ahead, here are a few tips that may assist you in making the correct decisions:
Review those spending habits
What did you spend money on in 2021?
Are you spending more than you’re investing? Do you have a safety net or flexible spending account? These are the types of financial behaviours that set those who are financially secure apart from people who remain in debt.
Now more than ever, you need to be considering saving for a rainy day, as no one knows when COVID-19 will become a thing of the past (if ever). Spend your money on NEEDS and not things you want to need — only the essentials should factor into your monthly budget. So, when it comes down to choosing an expensive dinner with friends over paying your water bill, what will you choose? Remember: Bills before frills, always.
It’s time for a full life audit
You may see this as a time-consuming task. However, taking a complete life audit may be just what you need to achieve your financial goals this upcoming year.
A life audit includes: listing all your goals, both long-term and short-term. Then, take a visual look at your habits/lifestyle and get down to re-prioritising, paying special attention to those things that are most important to you. Use a journal to brainstorm or even create a vision board. Then, align these elements with your cash flow and financial planning.
This process is meant to assist you with re-evaluating your life goals and changing your mindset when it comes to money management.
Get ready for your worst-case scenario
As the saying goes: ‘It’ll get worse before it gets better’. When push comes to shove, will you have all your ‘financial ducks’ in a row?
We all need a backup plan. Nobody wants to get caught in a predicament where there are no finances to cushion the blow of an unexpected situation. This is why it is vital that you spend some time updating all listed beneficiaries on your financial accounts. This includes your retirement, benefits and investment accounts. It is also important to review your estate planning and asset protection.
If you’ve never approached this type of long-term financial planning before, it may be a good idea to get a lawyer or financial advisor on board to assist you.
Save for your retirement
Retirement planning starts with thinking about your retirement goals and how long you have to meet them. When setting this goal, it is important to consider the type of lifestyle you hope to lead after retirement, and how much funds you will need to sustain said lifestyle.
Increasing your retirement contributions are a great way to ensure that you meet the requirements of the lifestyle you want.
A great tip for making sure you stick to this particular financial goal, is to automate your savings. This means going to your financial provider and making your retirement contributions automatic each month. This creates an opportunity to grow your retirement investment without having to think about it too much.
*Check out the latest edition of the Public Sector Leaders publication here.
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