Achievieng Financial Success in 2024

A Month-to-Month Planning Guide

By Raine St.Claire

With rising costs for essentials like food, fuel, and electricity, the new year presents an ideal opportunity to add financial fitness to our resolutions.

In simple terms, financial fitness means possessing the skills, knowledge, and tools to make wise money decisions. Basics like saving, debt management and contemplating retirement form the core of a financially fit lifestyle.And achieving financial fitness is very similar to developing a fitness routine - it demands planning, discipline, and perseverance. It involves an understanding of proven principles for a healthy life.

Much like adopting a fitness regimen brings benefits and confidence, being financially fit means skillfully managing money for present and future needs. Having, and sticking, to a financial plan helps save for emergencies, avoid debt, and build good credit, all crucial for financial security. To kickstart your journey to managing your money, here’s a monthly breakdown of practical tips to help you achieve financial fitness.

Top Tips For Financial Fitness

1. The 50-30-20 Rule

Allocate 50% of your money toward needs, 30% toward wants, and 20% toward savings, which includes money needed for future goals.

2. Automate Your Bank Accounts

Automate your bank accounts – a key practice of financially wise individuals. Set up automated transfers from your checking account to savings, bill payments, and contributions to retirement funds. This ensures a clear understanding of your spending, eliminates late fees, and designates leftover money for discretionary spending. Keep track of your spending to avoid overdraft fees and refrain from transferring money back from savings to checking if you run out.

January is Financial Wellness Month -Time For Financial S.M.A.R.T Goals:

• Specific: Set clear financial goals and determine savings needed for your dreams, including an emergency fund. Budget for special celebrations like Valentines, Easter, and weekend breaks.Consider expenses like car servicing and licence fees, haircuts and birthday presents.

• Measurable: Compare incoming vs outgoing monies.

• Actionable: Develop actions to achieve your goals, track and adjust spending regularly.

• Realistic: Ensure goals are achievable.

• Track: Evaluate daily expenses, especially on take-outs and quick fixes.

February – Financial Wish List

• Establish short-, medium-, and long-term financial goals, such as saving for a holiday, a house deposit, studying and retirement.

• Clearly define timelines, monitor progress, and set requirements to achieve each goal.

• Use income growth, bonuses, and windfalls to boost savings and investments.

March – Expand That Rand

• Examine your budget for expense reduction or revision.

• Optimise life, home, auto, and other insurance policies.

• Negotiate premiums with current service providers or shop around for better deals.

• Terminate unused subscriptions and monitor in-app purchases to control spending.

• Avoid high - cost cash withdrawals from non-affiliated banks or using credit cards.

April – Reduce, Reuse, and Recycle

• Reduce expenses by reusing and recycling.

• Explore lift clubs or public transport options to cut fuel costs.

• Sell unwanted items and consider swapping or sharing items.

• Explore energy options to reduce reliance on coal-based electricity.

May – Manage Your Debt

• Control spending growth, keeping it proportionate to income.

• Develop a strategy to eliminate high-interest debt.

• Address potential issues with loan repayments and allocate available cash to repayments to reduce debt faster.

• Begin by targeting high-interest debt, such as credit card or store credit.

June – Financial Check-Up

• Schedule a mid-year meeting with your adviser or personal banker.

• Review your will, investments, and insurance.

• Assess if changes in your circumstances warrant adjustments to your insurance for financial protection.

July – Year- End Planning

• Start holiday preparations early.

• Book holidays in advance, buy gifts on sale, and save store rewards points for year-end expenses.

• Planning ahead avoids last-minute stress and expensive purchases.

August – Automate and Consolidate

• Combine or consolidate investments and loans to reduce costs.

• Explore redirecting retirement annuity contributions towards your employer’s fund.

• Utilise direct deposit for savings accounts to prevent unnecessary spending.

• Use autopay for recurring bills like mortgages and student loans.

• Employ money management apps to track payments and expenses.

September – Build a Contingency Stash

• Invest in a tax-free savings account (TFSA) with high yields for emergency funds to avoid dipping into long-term savings for emergencies.

October – Tax Return

• Prepare and submit your personal tax returns on time to avoid penalties.

• If working from home, get a letter from your employer to claim qualifying expenses.

• Comply with home office requirements and understand potential impacts on capital gains tax.

November – Tax Refund

• Use a tax refund constructively, whether contributing to a TFSA, making a significant purchase, or allocating it towards debt repayments.

December – Planning and Budgeting

• Review your budget and cash flow.

• Allocate money for additional expenses during the festive season.

• Be strict with spending-stick to your budget.