Give yourself a 2020 financial detox
The word detox can be quite daunting especially when the goal is to start the year on a clean slate. Yet more so than before, people are looking at detoxing and simplifying their lives by reducing the clutter and focusing more on themselves or their family; and ultimately looking at achievable goals that will best suit them in 2020.
Financially, it means looking at ways to save more and ensure that you are saving for the things that matter. “2019 was a tough year for everyone, but it was a year that taught people to reflect and look ahead with much positively and enthusiasm,” says Ester Ochse, Product Head, FNB Money Management. “Whilst many may feel quite strained financially after the festive season, we do believe that there are ways to manage this.”
A financial detox is a ‘type of a cleanse’ that will guide you to get rid of those unwanted spending habits and will help you develop sound spending habits. It forms the basis of all financial life’s disciplines and will leave you feeling emotionally lighter. “Sometimes our conscience gets the better of us, especially when we overspend or splurge on items that we don’t actually need. Detoxing yourself financially will help you ascertain what your ‘needs’, ‘wants’ and ‘requirements’ are. And will be your stepping stone to financial stability and freedom,” says Ochse.
Many people believe that they will not be able to detox financially as they are so deep in debt. But with the correct mindset and methods, a financial detox is possible. Ochse highlights a few steps that can help you get started on your financial detox.
Start with a plan
Plan your year with a detailed calendar. Highlight where and what you will be doing, get the estimated costs. This will give you an idea of where you need to budget and limit your spending. Also remember that you will need to save a bit extra to cover some annual expenses, like school camps for kids or new tyres on the car.
Update your budgets
If you don’t have a budget, it would be a great to start one now. Besides daily household costs, your budget should hold your entertainment, wardrobe, holiday and any emergency expenses. It’s your ultimate blueprint that will help guide you through each month and year.
Fuelling your budgets is a well-defined goal-set. Your short or long-term goals will help you determine how much you need to budget for each goal.
Get help if needed
There is nothing wrong with asking for help. If you are unsure seek help from a professional financial advisor who will guide and put you on the right path. They can also assist you to stick to the goals that you have identified.
Spend in the right places
A financial detox doesn’t mean that you should stop spoiling yourself. Spend on the things that you need and spoil yourself now and then. It’s good for your soul!
Review and refresh
Look at your budget and track what and how you have spent. This will give you an idea of where and what you need to cut back on and what you need to focus on.
Managing your finances can be stressful especially if you are deep in debt. “Your financial detox will not only provide relief on your pockets but also help your emotional needs as well. So, take that step and detox your finances, you will be grateful you did,” concludes Ochse.