How to Set Financial Priorities for the New Year

How to Set Financial Priorities for the New Year

With the start of a new year and decade, now is the time to set your financial priorities. This easy-to-follow guide can help you set yourself up for success!

Look at your needs and life stage

Everybody’s daily life is different, and can invite varying financial pressures, successes, stresses and inconveniences. Taking an honest look at your own situation is the first major step to setting your financial priorities going forward.

Your finances don’t have to define you. Managing your money and ensuring you have the cash to meet any necessary expenses is important to live life healthily, happily, and to be able to reach all of your future goals.

While the saying 'Age is just a number' might ring true, your age can however influence your financial priorities and goals – and depending on which decade of your life you’re in, you will need to adjust your plans and expectations accordingly.

If you’d like to get some guidance on what you could and should plan for at each stage of your life, our easy guide for your 20s, 30s, 40s, 50s and 60s can help you get your finances back on track.

What new milestones can you expect in the next three years?

Where you are in your life, as well as your age, might present different financial expectations. While one person might be planning to have children and start a family, another might be preparing to take on a new job.

When evaluating your life stage, you should consider what major milestones are important to you, and which ones you should begin to prepare for within the next few years. For example, if you have your eye on buying your first property, saving up for a deposit of at least 20% will stand you in great stead when applying for a home loan.

Of course, life is full of twists and turns and you don’t need to have an exact idea of where you’ll be in three years’ time. However, identifying what you consider important and what you want to achieve in the short-term can be a great way to help you lay down practical steps to reach your goal on-time and on-track.

Review the past year’s bank statements to see what went well and what didn’t

Looking back at the past year, there were probably months that offered up amazing financial success – and maybe those that didn’t. Perhaps you managed to budget well at the start of the year but struggled as the festive season drew to a close.

It’s easy to feel as if there’s no guidebook to spending. However, there is a handy reference you can use to track your own progress – your bank statements!

Referring to your spending habits and taking a closer look at your financial activity over each month of the year can help you identify what went well, and what didn’t. Did you manage to save any of that sudden bonus? Did you repay any loans or credit on time? Could you have spent less on non-essential purchases?

Remember that when it comes to managing your money, your biggest competition is yourself. By looking back at your own history, you can learn useful lessons about yourself and how you manage your money, and put practical steps in place to prevent yourself making the same mistakes twice.

Use technology to help you get ahead

Many South African retailers and brands have released their own app or loyalty programme, and if you’re a frequent shopper or have a favourite store, getting on board can be a great way to save!

All of us have needs and wants, and similarly, we either make essential purchases or tend to splurge on something we might really want, but may not need; and if you consider your own spending, the largest part of your expenses might sit with what groceries or other necessities you buy.

By using technology, such as mobile apps, price scanners, or comparison websites, you can quickly browse deals and find the best price for what you’d like to buy without the need to physically shop around.

You can even download saving or budgeting apps such as 22Seven – or use your bank’s app – to help track your savings goals and keep you up-to-date on your progress.

Plan birthdays and special events in advance

By looking at your year ahead and planning out events that you wish to celebrate – whether they’re friend’s birthdays, religious or festive occasions, or other anniversaries, you can add any potential expenses you might incur into your budget ahead of time.

Setting specific savings goals and setting accounts aside for special occasions can prevent you spending more money than you’d like to, or have available.

Choose three financial resolutions for 2020 and set goals and milestones for each

Being competitive with yourself is a healthy and positive way to make progress – especially with regards to managing your money; and as no one knows you better than yourself, why not set a number of challenges to complete as the year progresses?

You can develop financial resolutions that are relevant to your needs and long-term goals. Perhaps you could set a long-term goal of investing or buying new assets – and you could use this year to start saving and celebrate major milestones along the way.

Or perhaps you could plan to manage your debt in 2020, and to start, you could set the goal of paying off your existing loans – taking the time to celebrate and acknowledge your hard work as you successfully settle each one.

By taking the time to map out what resolutions you can take on, you can set yourself up for financial success and competitively work towards reaching your financial priorities.

If you need help coming up with an idea for a financial resolution, why not take our 52-week savings challenge?

Start the 52-week savings challenge

As we enter a new year and a whole decade at the start of 2020, what better way is there to set the tone for all the days, months, and years ahead with a savings challenge?

Our 52-week savings challenge can help you save up to R14,000 per year in just a few practical and simple steps; by saving incrementally across a number of weeks, you can build saving discipline, set money aside for the future, and begin a new challenge that – if repeated each year – can be a powerful way to build your capital and set money aside for future goals.

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