2022 has been a memorable year on all fronts, and with the New Year right around the corner, many are re-examining their choices and auditing their life to see how they can do better. The age-old new year, new me maxim will be thrown around in a few days as if when the clock strikes 12 on New Year’s Day, you automatically shed your old self and put on a new you. Since you are reading this right now, my guess is you probably belong to this crop of people seeking a new you in 2023.
A good place to start practicing this ‘new you’ is with your finances. If you are looking forward to having a financially successful year, then you need to build better financial habits. This calls for a complete overhaul of your current habits in order to help you come up with a solid roadmap for your finances that will ensure you make progress on your short-term and long-term financial goals.
Here are six easy ways to help you achieve this:
Audit your current spend and budget: Before you start getting prepared for something new, it makes sense to examine your current situation to help you figure out where you will need to make necessary adjustments. Take a few minutes to carry out a quick audit. What is your 2022 financial report looking like? Where did you spend the most money? Are there unnecessary expenses you need to cut back on? Did you take on new debt? Taking stock of how much you are spending and how you expect that to change in the new year can help you stay on track to reach your goals.
Plan ahead: The popular saying goes, if you fail to plan, then you plan to fail and that much is true for your finances. Now that you have audited your current budget and seen your spending chart in HD, it’s time to swing into action. Do you have any goals that will require major expenses in the upcoming year? – A new degree? Vacation plans? Are you looking to move to a bigger apartment? Or do you want to get a new car? Now is the time to make the financial plans for the upcoming year, draw up these expenses against your projected cash inflow so you can be prepared for when they will occur to avoid throwing your budget off course.
Review your income inflow: Did you get a promotion, a new job or a new compensation package? If you answered yes to any of these, then it makes sense to revisit your budget and spend chart to determine how this change may impact your cash flow. A pay increase comes with an opportunity to increase your savings and investments, which also allows you to set aside more funds towards personal things like entertainment and vacations. Rather than falling prey to lifestyle inflation, commit to ensuring you increase your net worth and make sure you are setting enough aside to cover your running expenses and savings to hit your goals in a timely manner.
Get ahead on your investments: Beyond auditing your spending habits reviewing and planning for the New Year, you also need to get ahead of your investments. As with almost anything, investing is personal and not a one size-fits all. Tailor your investments according to your risk appetite and income size. A good place to start is to explore Eurobond savings denominated in foreign currency to beat inflation. You can also consider real estate, stock options and purchasing shares in foreign currency – many digital finance organisations have tons of offers in this regard. The most important thing to do is to research what options best suit your needs.
Maximize your retirement contributions: A big part of attaining financial freedom is having a solid retirement plan. While saving for retirement may not be top of mind for you on a day-to-day basis, it is important to grow your nest egg for the future. If you already have a retirement savings plan, ensure you keep track of your savings and research other ways to increase your contributions so you are covered as you get older.
Replenish your emergency fund: Globally, 2022 was a rough year for the economy and no doubt, you may have had unexpected expenses which led you to dip into your emergency fund a little, or a lot, – after all, that is what it is there for. However, the most important part of using that safety net is to have a plan in place for how you will replenish those funds. Leverage your end-of-year bonuses, 13th month salary or cash gifts to replace what you took out. Remember, it is ideal to have at least three to six months’ worth of expenses in your emergency fund, this way you can ensure that your bigger financial goals are not derailed by short-term financial emergencies.
Bonus tip – Use up your insurance funds that will expire soon: If you have an insurance plan, it is important to note that these plans typically have a “use it or lose it” provision and may not roll over from year to year.
Depending on your coverage, you can use the funds to cover the cost of medical and dental expenses, automobile care expenses, personal care items, and more.
Overall, if your financial situation is still a work in progress, then these tips are sure to help you figure out ways to course-correct. As you chart your roadmap, do not discount the power of discipline and consistency. Little tweaks to your spending habits, savings and investment strategy can all add up to major progress toward your money goals. If these prove challenging, you can reach out to a financial planning company like Seolahm Consulting to work with you to help you achieve your financial goals.
I am rooting for you. Here is to a financially successful 2023!
About Adesuwa Edokpolor
Adesuwa Lilian Edokpolor is an experienced Banking Professional and Management Executive with over 15 years extensive experience working in roles across corporate and commercial banking, investment banking, sales, marketing, and client relationship management.
She has worked with leading financial institutions across Africa including Nova Merchant Bank, UBA Group and Zenith Bank PLC. She is passionate about driving results and she leverages her understanding of the dynamics of the banking industry to drive the development, implementation, and execution of growth strategies of these organisations.
Adesuwa is currently the Managing Partner at SEOLAHM Consulting – a boutique financial consultancy firm offering financial advisory, training and portfolio development services.
Adesuwa Edokpolor – Managing Partner, Seolahm Consulting
