Financial Resolutions You Should Consider This New Year!
Resolutions to Start the New Year
Below are some of my thoughts and ideas about financial new years resolutions. These I have applied in my own life and many of my clients have applied these in their own lives. Success is very much linked to your commitment.
It would be awesome to hear back from you on your progress as you follow these 5 steps.
1. Become Debt Free
Have a plan. Paying endless amounts of debt will ensure you never ever reach financial freedom. The institutions that lend money, make it so easy to get more and more as their return is fantastic.
Remember, that one mans debt is another mans investment.
Getting out of debt needs to be a priority but do it with a plan. I recommend small goals (like reaching certain levels of reduction ever 3 months). Find someone to hold you accountable.
2. Have an Emergency Fund
This is the get out of trouble fund. Trust me there will be emergencies. If you have not experienced one (yet), you are lucky.
This does not have to be life and death situations emergencies. Think about hitting a pothole and the need to buy two new tyres and fix your mag.
That could be R5 000 plus. Do you have that available? I know you can use a credit card for this but then you are defeating step one, aren’t you?
The goal, is 3 months of living expenses in a fund that you can access immediately. This is not a unit trust, ETF or some other fixed deposit or even worse, your Tax Free Savings Account.
3. Draft or Update your Will
If you don’t have this important document, the government will decide who gets your stuff. Without a valid will that is executable, the Law of Intestate Succession will apply. You don’t want that.
I get it, no one wants to talk about death, as we all think we won’t die now. Right? Well sorry to break it to you, you never know when you will die, so plan for it.
If you have a will, review it every 12 months, if you don’t have a will, get one!
4. Protect the Bread Winners
Your most valuable asset is your income earning ability. Without the ability to generate an income, what will you and your family do?
If due to ill health, an accident or a disability you cannot work or earn an income, you become the next child in your home.
Someone who takes but does not contribute. Make sure you get income protection (or income replacement cover).
What would you be willing to do to protect an asset that could generate millions of rands? That is you! You have the ability to generate millions of rands, protect that ability.
5. Plan for Retirement
One day you will want to stop exchanging time for money. One day you will want your passive income to exceed your active income.
Now you will have options on what to do with your time. That is retirement. That is financial freedom.
Plan for it today and get started, no matter how large or small.
As a financial planner, retirement planning is all aboout the lifestyle you want to live, how you want to spend your time and what you want to do with your days.
Will you have enough?
This simple and easy to follow system will help get you started, no matter whether you read this in January, March of October. Just get started, don’t want for Monday, next month or next year. If you need help, you know I am here to help.
The thoughts, opinions and ideas shared in this blog, other blog posts and on this website are provided for educational purposes. Please do not act on them, please consider them general in nature and not financial advice directed at you. If you have specific questions or concerns, about your situation, reach out to me or your financial planner for advice. Any actions or inactions on your part, are your responsibility, neither Terence Tobin, Rich Ideas Group, staff or partners will take responsibility of any kind.