As 2022 ends in a few days time, many people are taking stock of the year’s events and preparing for the next year by setting their new year resolution. Your personal finance is an area of your life you should be more intentional about.
Starting off the New Year with a financial checklist will be a great kick for finances and what better way to take action by having a list this year.
A checklist is a list of items required, things to be done, or points to be considered, it’s also used as a reminder.
A financial checklist is therefore a list of things to be done or considered or be reminded about.
Below are some essential financial decisions to have on your financials checklist for 2023.
Track all your expenses
To do better with money in 2023, you need to track all your expenses.
Pick a day and time to always do it in order to make it a habit, you can use several methods such as writing it down or downloading a budget app, or simply using a spreadsheet.
Tracking your expenses involves; writing down before spending and after spending. Creating a budget for your expenses is how you track it before spending. Start by writing down your non-discretionary expenses(needs such as food, rent, fuel, clothes, etc.) and then whatever is left to your discretionary items such as eating out, Cinemas and all and also your income including passive income, finally write down what you spent on these things at time you have chosen, using your bank statement can also help.
This helps you know where your money is going and keeps you accountable on what you can afford and where you need to cut back.
Create an Emergency Fund
This is a fund that covers up to three months of your non-discretionary expenses(needs such as food, rent, fuel, clothes, etc.).
It is a safety net for future mishaps, or unexpected foreseen
Paying Debt on time
This year alone inflation has been on a record high causing the Central Bank of Nigeria (CBN) and Money Policy Committee (MPC) to hike the Monetary Policy Rate (MPR) repeatedly over times.
The MPR being the benchmark of other interest rates has caused interest rates on loans from banks to increase too.
There’s so much uncertainty about next year and another rate hike. What you want to do is make sure to pay off your debt in time if you have one, and add it to your budget list.
Increasing your savings
Saving more is the most popular financial advice and financial goal.
There are lots of ways to save more effectively thanks to technology which are automated, you can carry out your and find one that suits you.
Also investing in financial advisors to help you navigate your financial decisions will go a long way in achieving your goals.
Insurance
Insurance should be a part of your investment portfolio for next year.
It is a financial protection and / or savings vehicle which gives insurance policy holders the means of protecting the financial wellbeing of loved ones.
This combined with savings and investment are excellent ways to hedge against different contingencies that may arise in the course of living.
