There’s a common saying that the beginning determines the ending. How would you like your December 2020 to look like? You have to paint the picture now and then work towards achieving your goal.
New Year resolutions are a common thing. Some work. Some don’t. What differentiates both, however, are actionable steps.
So what are your Financial Goals for 2020 and how can you achieve those goals you have set? These tips will help you:
Write it down
A short pencil is better than a long memory. Write down your plans for the year and be very specific. Doing so forces you to think through and be realistic. It also serves as a great mental reminder. You will find it very hard to forget in entirety what you wrote.
Draw up a budget
Earning, in some ways, is never the problem. Your earnings are very much clear. You get an alert when you are paid. Your profit is quite clear. Spending, on the other hand, is always the troublesome part. The money just tends to go in trickles and before you know it, it’s finished.
That is why you should have a budget. A budget does not mean you can’t spend on fun stuff. It just helps to make your spending more orderly. You do not want to be the person who just spends without a budget.
Build an emergency fund
Emergencies never inform us when they happen, that is why they are called emergencies. Rule of thumb says you should have at least six months of your monthly income in an emergency fund. The figures could, however, rise if you have a family. The mix of currencies could also change if you have obligations outside the country.
Invest in a mutual fund
If you are new to investing, a mutual fund is a great place to start from. It is relatively affordable so you don’t have to break the bank. You also don’t have to bother yourself with the day to day management of the fund. Asset managers send a quarterly report, which you can go through.
Build a stock portfolio
Stocks are a great way to diversify one’s portfolio. Treasury bills are currently yielding single-digit returns at the moment. Some stocks, on the other hand, have dividend yields as high as 13% to 15%.
An ideal portfolio should have a little bit of everything.
Start a side hustle
Extra money is always a great thing. You can start a side hustle in 2020. A side hustle does not mean that you have to be physically active. You can do something as simple as reviewing CVs or even taking classes on cooking on WhatsApp and Telegram.
Read and listen to podcasts
At the end of the day, you are the person most affected by the ups and downs in your finances. That means you need to get a hang on your numbers. You can read books on personal finance. You can watch videos on youtube. You can also listen to podcasts. There are two things you do not completely outsource. Your finances and your health.
Invest in personal development
Personal development is the biggest investment you can make. The returns are infinite. Take a course, read a book pertaining to your field, watch a youtube video or listen to a podcast. Don’t end 2020 the same way you began. The higher your earning capacity, the higher your income and ultimately the larger the amount of money you can save/invest.
Reinvest your returns
If you keep spending the returns on your investment, it’s like planting a seed and then digging the soil. The seed will not do very well. Compounding is a powerful principle.
Have you made previous resolutions and failed to keep them. You should get an accountability partner. An accountability partner is someone who holds you to account regarding your goals and encourages you to stay on track.
An ideal partner should be someone who understands your goals and weaknesses. They should also have goals they are aiming for as well, so you are motivated too.
Have any other financial tips? Go ahead and share.