As the year winds down, many of us feel the urge to declutter—our homes, our closets, even our digital files. But have you considered decluttering your finances?
Like trying to pour new oil into an old wineskin, holding onto outdated financial habits, cluttered records, or misplaced priorities can prevent growth and stifle opportunities. To make room for the new, here’s how you can clean up your financial life and position yourself for a prosperous new year.
1. Declutter Your Financial Records
Messy records lead to missed opportunities. Are your bills, receipts, and account statements in order?
If not, this is the time to:
Organise: Create a system for tracking expenses and income, whether digitally or physically (labelled files). I do a lot of labelling still.
Review: Go through your financial statements. Look for recurring charges you no longer need—like unused gym memberships or streaming services—and cancel them. Share subscriptions where applicable.
2. Clear the Closet of Poor Spending Habits
We all have those “What was I thinking?” purchases.
Clear your financial closet by:
Reviewing Expenses: Assess spending patterns from the year. How much went to wants versus needs? Did you justify impulse buys with “I deserve it”?
Setting Limits: Use the 50/30/20 rule in the new year—50% for necessities, 20% for wants, and 30% for savings/investments.
Budgeting Tools: Use apps to track and control your spending habits.
3. Refresh Your Savings and Investments
Is your money working for you, or is it sitting idle?
Just as a messy closet keeps you from finding your best outfits, disorganised finances can obscure your financial potential.
Reassess Savings Goals: Whether saving for a house, car, or emergency fund, evaluate if your targets still align with your priorities.
Update Investments: Shift funds from underperforming investments. Consider new opportunities like dollar-denominated funds or gold-backed investments, especially in Nigeria’s volatile economy.
Start Small: Haven’t started investing? Open a money market fund or explore treasury bills.
4. Declutter Your Mindset
Your financial mindset influences your outcomes. Holding onto a scarcity mindset (“I’ll never have enough”) or fear of loss can limit your growth.
Embrace Abundance: Visualise wealth and take proactive steps toward it.
Educate Yourself: Take a finance course, read a book on personal finance, or join an accountability group to reshape your outlook.
Seek Support: Find a financial mentor or partner with like-minded individuals who inspire growth.
5. Make Room for New Opportunities
Clearing the clutter isn’t just about removing the old—it’s about creating space for what’s to come. Opportunities don’t thrive in chaos.
Start Networking: Join groups or events that align with your financial goals.
Prepare for Emergencies: Build or update your emergency fund. Opportunities often come disguised as challenges.
Plan for Growth: Whether it’s acquiring land in an emerging area or starting a side hustle, position yourself to seize opportunities.
As we step into a new year, let go of what no longer serves you—whether it’s cluttered records, harmful habits, or limiting beliefs. Create space for the opportunities, growth, and financial breakthroughs that lie ahead.
Remember: just as a clutter-free room feels refreshing, a clutter-free financial life can transform how you approach money. Clear the clutter, create space, and begin the New Year with a clear vision and a fresh perspective.
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