2 minute read
Planning Perspectives
Do yourself proud this festive season
It’s fine to let your hair down, but don’t let your guard down, otherwise you’ll start 2021 with a serious debt hangover, writes Lesego Monareng
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THIS year will go down as one of the strangest in history. So much has changed since January: the way we work, the way we shop, the way we teach our children… It might not have been a good year, but 2020 has certainly been momentous. It deserves a proper send-off and a little celebration in December.
But the festive season has its own set of problems and pitfalls, especially when it comes to your money. It’s fine to let your hair down, but don’t let your guard down, otherwise you’ll start 2021 with a serious debt hangover.
Research into behavioural finance has shown how important emotions are when it comes to making decisions about money. Here are some tips to help you keep your emotions in check and be smart with your finances.
LOOK BEYOND DECEMBER Dream!
Choose one important short-term financial goal that you want to achieve in the next 12 months. It’s human nature to want to progress and improve – visualise yourself in 2021 and think about how to be better than you were in 2020. Some prudent goals might include becoming debtfree or starting an emergency fund, but you can aim for bigger, brighter things: buy property, upgrade your car, or treat the family to a welldeserved holiday?
Having a goal that is important to you – and only you – will help you avoid reckless spending. Once you’ve safely navigated Christmas and New Year, you can start saving towards that goal.
RESIST TEMPTATION
Retailers know all about the power of emotion. At this time of the year, they deliberately put things in front of you that 19 are so tempting: those fancy chocolates, that beautiful dinner set, a new summer dress – and it’s on sale!
Make a list of the things you need before you go to the shops to limit aimless browsing and spending. Even better: use online shopping.
EXPLORE NEW WAYS OF MAKING MONEY
Out of crisis comes opportunity. Now is a great time to reflect on the year that has passed and see how you did and how you can do better. Morgan Stanley’s MSCI All Country World Index, which tracks broad global market performance, was up 20% for the period January to November 2020 – far from the predicted doom and gloom.
Sectors booming include healthcare, technology, online shopping and logistics. Chat to a Certified Financial Planner (CFP) about investments that track the best-performing sectors of the market to deliver long-term growth. A CFP will help you set up clever saving funds for non-negotiable payments like rates, electricity and school fees, which will free up income for investments.
GIVE YOURSELF A BREAK
Do your annual financial health check: review your monthly budget, check on any investments you might have, decide whether you still need all the insurance you’re paying for and see which monthly costs you can cut. All good? Now give yourself a break. You’ve earned it.
The poet and US civil rights activist Maya Angelou said: “No matter what happens or how bad it seems today, life does go on and it will be better tomorrow.”
Here’s to coming back with a bang in 2021!