Personal finance checklist for the new year

Brief Note: This is my first post of 2020 and I want to thank all the people who keep coming back to CediTalk. If this is the first post you are reading here, I hope you find it worthwhile to become a regular reader. I believe this year will be our best year yet. I’ve got a whole lot of content on personal finance, investing, macroeconomics and public finance lined up for the year and I cannot wait to share it. If you enjoy the content on CediTalk, do consider sharing links to our articles with your friends as that really helps the site to grow. Thanks!

I’m dubbing this year, “the Year of Fundamentals”. “Fundamentals” in this case has nothing to do with stock valuation but rather a call for a focus on getting the basic things right. We need to get the fundamentals right before thinking of doing more complicated things.

I have compiled a checklist of fundamental personal finance objectives that need to be accomplished this year to set the stage for financial independence and financial security. These are things I am working on as well and I hope you find them useful in your own life.

A stable career or business. People with well-paying, stable jobs with guaranteed pensions have a huge head start towards financial independence. They can afford to make mistakes that would be disastrous for almost everyone else. In a country such as Ghana with (almost) no safety nets, the competition for such stable jobs is ridiculously tough. Many people are unemployed, underemployed or underpaid. Nevertheless, preparing yourself skills-wise to be able to take advantage of any opportunity that shows up is essential. It’s okay to be among the many who are denied an opportunity but do not be one of those who were offered the opportunity and failed to take it. If you are self-employed, be sure to make your pension contributions a non-negotiable expense. You will be thankful for it.

Healthy relationships. This is not my area of expertise but I know that poor relationships can be a huge drag on finances while healthy relationships can be a major boost. This is not solely about romantic arrangements but also with respect to relationships with family and friends.

The right attitude towards money. Let the Year of Fundamentals be the year in which you no longer wonder how your money got finished. Let it be the year which you stop being “bad with money”. Money is a serious thing and money management is an essential skill for any adult. Prepare budgets, track your income and expenditure, take pride in your ability to control your expenditure, look for gigs to generate extra income, and do not succumb to pressure to spend to impress.

Automate savings. There’s no way around this age old advice. It is tempting to believe that you can take all your income, meet your expenses and then have enough left over to save. Do not be tempted this year. If you do not already have one, go to the bank and set up a standing order to transfer a percentage of your income each month to a savings scheme. It could be a mutual fund, a private pension fund or a high paying savings account with a bank. Just go and do it.

Health is wealth. Healthcare costs can throw any plan right out of the window. This is perhaps the biggest item on my checklist for the year. Get medical check ups, eat a healthy diet and exercise to counter all those hours you sit behind the screen (yes, I’m talking to myself). Also, take care of your mental health. Drop the stigma against seeking proper care for your mental health. The brain is part of the body and just like every part of the body it also needs care.

Enjoy life. Life is a gift, enjoy it. Find the things you really love doing and do them to maximize the quality of your life. We are not working this hard only for the hope of a better life someday, the future is too uncertain for that. Make sure that you create memories that you can look back on with fondness.

Source: ceditalk.com