Via Nappy.co
Via Nappy.co

It’s too late for resolutions but you can still set financial goals

By Opinion Time of article published Feb 2, 2021

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By now the festive break is a faded memory and even some of your best-intentioned resolutions haven’t made it through January.

Perhaps that’s why it’s best to wait until February – when you’re confronting life’s realities, not to mention the possibility of an extended Level 3 lockdown – before you decide what improvements to commit to this year.

“With all the uncertainty that Covid-19 has brought, making resolutions may seem a bit pre-2020, but consider that by setting and achieving some realistic goals you can accomplish two things: improve your circumstances and take back some control,” says Shafeeqah Isaacs, head of financial education at financial services provider, DirectAxis.

For many people, even in stronger economies, Covid-19 has and continues to take a toll on financial wellbeing.

A survey of US consumers showed that living more prudently ranked among the top five 2021 resolutions for Americans, with 30% of respondents setting this as a goal. Other than spending more time with family and friends, the remainder of the top five related to being healthier and losing weight.

It’s difficult to find similar, verifiable figures for South Africa, but perhaps not too much of a stretch to suggest that after 2020, health, social relationships and financial wellbeing are likely to feature high on most Mzansi lists.

Finances may be more top of mind after the double whammy of the festive season and the fact that many people get paid early in December, making January the longest month to wait for your next pay cheque.

The fact that 80% of people don’t even try to keep the resolutions they made on New Year’s Eve also means that by now, most of those well-meaning weight loss and exercise pledges have probably already fallen by the wayside.

“Yet it’s not too late to set some financial goals,” says Shafeeqah.

Together with some in-house experts from DirectAxis, she’s come up with some ideas that may help you improve your financial situation and take back a bit of control.

Getting the basics right is important and the first step in setting financial goals is to understand where your income goes each month. It’s pretty easy to do. List your income on the left-hand side of a piece of paper and your monthly expenses on the right. You should be able to get most of the information from your bank statement.

Alternatively, there are plenty of online budgeting tools that guide you through the process. One of these can be found here.

This will give you a clear picture of how you’re using your money and allow you to set some targets to reduce your spending or save and invest a bit more.

Check your credit score. This is the measure that banks, other financial services providers, retailers, and even landlords use to find out how financially reliable you are. A poor score will limit your ability to access finance or may result in you paying higher interest rates because you’re considered a greater risk.

You can check your credit score here for free. If your score is in the red or grey range, consider using the tips provided to improve it. An improvement of 20 points is achievable for most people. The benefits of a better score includes access to more financial services offerings as well as potentially saving money on interest.

If you’ve decided to focus on your finances, consider adding to your financial knowledge. There’s plenty of information available online, including specific topics you want to know more about, tips and even videos.

In fact, there’s so much that it’s a good idea to decide on a few subjects you’d like to know more about and start there. Compare different websites and news outlets to make sure you’re getting sound, accurate information. Over time you’ll identify those channels that provide the details that best suit your needs and preferences.

While taking control of your finances will give you a sense of accomplishment and reduce your stress levels, don’t neglect your physical health – even if you haven’t stuck to your resolutions. International studies indicate there’s a correlation between physical, emotional and financial health. Some research even suggests that people who exercise regularly have better credit scores.

Another benefit of keeping healthy is that it will reduce your medical costs. Consider the potential future expenses of not living a heathy lifestyle and there could be a sound financial reason for switching off the TV and going for a walk.

‘These aren’t resolutions and they’re not in any particular order. Rather, they’re a set of ideas from which you can select one or more that you think will be most helpful and achievable to you,’ says Shafeeqah.

PERSONAL FINANCE

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