Financial New Year’s Resolutions you can keep, we are obviously at the end of the year, and we would like to remind you that this is the best time to start financially preparing for 2023.
The point of making this preparation is to get a clear picture of your financial health, so far and also to give yourself the opportunity to set and start your Financial New Year’s Resolutions plan; and tackle 2023 head-on.
We have prepared a new year financial planning checklist of things you can do to get ready, and we will be sharing it throughout the day.
Calculate your Net Worth (Review your assets and liabilities)
Your net worth is the amount of money that you have after accounting for your assets and liabilities. Before you can plan a budget and set financial goals, it’s important to do a complete overview of your assets and liabilities.
That means making a list of everything you own and everything you owe. It allows you to understand your current financial position and envision where you want to see your finances in the coming year.
The actionable step: You will need to draw up a personal balance sheet that shows your overall net worth.
2. Updating Your Savings Goals
Having money in an account you can easily access is tempting, and you do not want to end up tempting yourself after the good work you have done all year. It is very easy to spend money you have access to, so this is what you should do instead. Keep that money in an account that you will think twice before withdrawing from, such as the wallet on the Risevest app.
Also, set an amount that would be automatically removed from your account and sent to that savings account (auto-invest or autosave)
The actionable step: Take note of your savings and come up with a new target for the next year.
3. Build up an emergency fund
Unplanned expenses like medical bills or home repairs happen. This year there have been many job and business losses as a result of a declining global economy.
There are many other unforeseen circumstances that life brings that can disrupt your budget but the best way to hedge against this is by creating an emergency fund.
An emergency fund is basically a fund set out for emergencies.
It is usually your total monthly expenses, times 3 months and above. If your monthly expenses are N200,000 for instance, you will have over N600,000 saved up in an interest-paying account that is highly liquid so you can withdraw it almost instantly.
The actionable step: Calculate the amount to be in your emergency fund and start saving actively towards it.
4. Making a Plan To Pay Down Debts
If you have some debts, it’s time to pay them off, or just a portion you can afford at the moment, and also make plans to pay off as much as possible in the coming year.
The actionable step: take note of all debt you have and make a feasible plan to pay them up
5. Rebalancing Your Portfolio
As we all know, the market for your portfolio always has its ups and downs. And this year has had its fair share, Some sectors overperform, and some sectors underperform. Chances are that the sectors that did the best last year may not enjoy a repeat performance this year—and, of course, 2022 was pretty grim for most of them.
By rebalancing your portfolio to its original or updated asset allocation, you take steps to lock in gains from the sectors with the best returns and purchase shares in the sectors that have lagged behind last year’s leaders.
The actionable step: take a good look at all your investments and evaluate properly if you’d love to continue them. And which would get you closer to your goals.
6. Prioritize your wellness
The new year can be an opportunity to continue prioritizing your personal and financial wellness. Consider taking advantage of any employer wellness resources for physical, mental, or financial health.
7. Consider Investing in Ways That Matter to You
Everyone has that one thing they value the most when it comes to investing, from stocks to mutual funds, fixed income, real estate commodities you name it. As you make plans for the new year after reviewing everything you’ve done this year, ensure that they align with your values.
You don’t have to wait until 2023 to start your Financial New Year’s Resolutions plan; you can start today! Create a plan for 2023 and fund it immediately so you can keep the tempo high for the new year.