Why is it that we all seem to start off the year with a positive resolve to improve our lives, such as to finally spend less and save more – but then life happens and somehow the resolutions are derailed?

Willpower alone is not enough to meet your financial goals, if you don’t have a plan to start with. In this article we highlight how to go about identifying and achieving your financial goals in 2022!

1. Review the past year

Before making new goals for yourself, it is important to look back at the previous year and all the progress you might have made. Often goals were not met and that’s ok, especially in the context of Covid-19 – just be honest about what worked and what went wrong. That way, you can better identify what you want to achieve when it comes to your finances and how you can meet these goals more effectively.

2. Set your objectives and goals

Make a note of what you would like to achieve in 2022 when it comes to your financials. Remember, the best goals follow the S.M.A.R.T system (specific, measurable, achievable, realistic and time specific). Following this system will prevent you from reverting back to bad habits.

Small steps can be taken to achieve financial wellness by doing the following:

• Stop using your credit card or reduce credit card debt
• Save more
• Rebalance your investment portfolio
• Reduce your debts as interest rates this year are climbing
• Rebuild or replenish your emergency fund
• Improve your credit score
• Update your insurance for health and valuables (such as car, home, and portable possessions)

3. Know your debt

As a great starting point from which to build your financial goals for the year, make certain of everything that is owed and make a list with the smallest amount first. We suggest working your way down the list; as the small amounts are paid off and the list begins to shrink, this will create excitement in being able to pay off the larger amounts.

4. Set it up and forget it

When trying to create or grow any fund, it is best to set up a direct deposit that goes to a separate account or financial institution from the one where you keep the account to pay your bills. The point is to make paying yourself feel like a bill that needs to be paid every time you get paid without having to manually do anything.

This method is especially beneficial in the following situations:

• Saving for tertiary education
• Severe Illness Cover
• Life Cover
• Disability cover
• Retirement, Pension and Provident Funds

5. Stick to a spending plan and adjust bad habits

It’s a good idea to get an idea of your expenditure during a month by writing down all your expenses in a notebook. A lot of expenditure is unconscious and might be identified as wasteful or unnecessary. Where you identify this, consider redirecting that money to other goals instead, such as building your emergency fund or paying off existing bad debt.

6. Work towards the future of your business

If you are a business owner, it’s important to note that working towards only meeting the day-to-day requirements of your business can put your business in danger. It is not enough to only to concentrate on the liabilities that come with owning a business but to also look at business related components such as the following:

• Group Benefits: This can include Group Risk Cover, Group Retirement Annuities and Group Health Insurance
• Business Continuity: Examples of this is Buy-and-sell Agreements (agreement to buy and sell shares in the event of death/disability of a co-owner) and Keyperson Insurance: protecting your business in the event of death/disability of Key Individuals
• Business Short Term Insurance: Such as Building Insurance, Portable Possession Cover, Business Interruption Cover, and Cyber Risk Cover

Speak to one of our TVC financial advisors today to help you meet your financial goals in 2022!