2023 is finally here, heralding that time of the year when people start making resolutions.
These resolutions are likely to range from getting in shape to improving relationships and achieving a work-life balance, all in the hope of changing your life.
However, one area that is often forgotten is with regard to our finances, yet financial goals are supposed to be on top of the list of New Year’s resolutions because all the other goals you set are less likely to be achieved if you do not get your finances right.
While it is very easy to cut expenses and save more money, many people often give up quickly when the going gets tough.
The key is to set realistic goals, celebrate small wins on the way and get creative with your 2023 financial resolutions with the following simple tips:
Start Living Below Your Means
Living beyond our means is something many of us often do because we want to please our friends and family, we easily engage in impulse spending and sometimes even end up spending money we do not have!
However, if you want to avoid financial stress and stay stable in 2023, living below your means should be at the top of your New Year’s resolutions list.
Living below and within your means simply means leading a comfortable lifestyle you can afford while saving a portion of your income for future use.
It requires making conscious decisions that result in balancing your income and expenses.
Commit to a Budget Throughout 2023
Having a budget is one thing but sticking to it for 12 months is often the biggest challenge.
While many Kenyans are likely to draw up a budget as part of their New Year’s resolutions, most of them discard it once the first paycheck drops at the end of January.
Living within your means will require that you have a budget and stick to it so that you cut out all unnecessary spending.
Remember to always keep a notebook with your monthly income and expenses or look out for an online program or budgeting app to help with that.
Start an Emergency Fund
Financial emergencies are inevitable but how prepared are you? Without an emergency fund to caution you, you might have to make financial decisions that can hurt you in the long term, including digging into your savings, taking out a loan, or even starting fundraising.
If you want to avoid the challenges that come with different financial emergencies including loss of job, sickness, and bereavement among others, building an emergency fund should be among your New Year’s resolutions.
Gradually build the fund until it can cover at least six months’ worth of expenses.
Automate your Savings
Kenya’s saving culture has always been described as challenging due to poverty, inadequate financial education, and a limited range of available financial incentives.
Therefore, without enough motivation and willpower, you will likely miss or forget to save a portion of your income every month.
However, by automating the process, you will learn to pay yourself first by making “savings” the first bill you settle.
Automatic savings can give you peace of mind, prevent you from feeling guilty when you spend money and open the door to putting your entire finances on autopilot.
Liaison with your employer to make deductions such as retirement savings, insurance, and SACCO payments among others before depositing the balance in your account.
Extra Source of Income
Having one source of income is risky because the moment you lose it, you lose almost everything.
Therefore, to mitigate the risk, it is important to diversify your source of income and not be dependent on only one.
Make it your 2023 resolution to prioritize developing new sources of income to avoid financial instability and fast-track your financial goals. With multiple income streams, you will be able to achieve your financial goals faster, build wealth and even retire earlier.
Article Source: https://www.kenyans.co.ke/news/83248-five-financial-resolutions-every-kenyan-should-make-2023
