Setting financial goals for the year is a WalletWise way to staying ahead in 2024
In celebration of Global Money Week that took place (18-24 March 2024) which is an annual global awareness-raising campaign on the importance of ensuring that from an early age, we are financially aware, and are gradually acquiring the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve financial well-being and financial resilience – Standard Bank’s WalletWise is encouraging us to take a moment and proactively think about our finances.
The first months of the year can place multiple financial demands on us, leaving us financially strained. However, it also provides us with an opportunity to reflect on our finances and set realistic and achievable financial goals for the rest of the year.
Here are some of the things we can do to get started;
- Reflecting on our current financial position, this will help us identify our key priorities as we set our goals. For example, evaluating our debt obligations that we need to repay, checking if we have enough savings to help us cope with emergencies, drawing up or updating our budget to accommodate all our current monthly commitments, establishing if there are any long-term financial goals we need to start considering?
- Setting our financial goals and consider breaking them down into three categories: short-term (achievable within a year), medium term (3-5 years) and long-term goals (beyond 5 years). Examples of financial goals include (i) repaying debt quicker to reduce interest and free up monthly cashflow; (ii) start saving to build 3 months’ worth of monthly expenses to help with emergencies & (iii) personal goals such as saving towards an education, future vacation (December holidays), retirement, etc. Reaching our goals can be made easier by automating our savings to prevent spending unnecessarily and to ensure our savings grow.
- Drawing up a budget – which is a plan that tracks how we will allocate and spend money. Our budget should include (i) all our incomes (salary, side hustle money, stokvel payouts, etc), (ii) fixed expenses such as debt repayments (bond/rent) & (iii) variable (changing) expenses such as groceries, utilities, entertainment, etc. It is advisable to include savings as part of expenses in our budget to avoid leaving it unplanned for.
- Setting limits on our spend, tracking monthly spend against budget and aim to spend less than we earn. Tracking helps us stay on top of our finances. Some banks and financial institutions offer free budgeting and tracking tools which can help to categorise, track and set limits on our spend.
- After reflecting on our finances and we find that we are struggling to meet our monthly obligations: we need to review expenses to prioritise needs and reduce any wants. We may also consider reaching out to financial institutions that we owe money, to understand if there are options to arrange for repayments that suit our current affordability.
Setting realistic goals based on our current circumstances and having a plan of how we will reach each of our goals helps minimise financial stress.