Actionable tips for unlocking financial resilience this year
Opinion
By
Mercy Nyabwala
| Jan 04, 2024
The New Year just checked in, with consequent cheque-ins. As merry-making concludes, we begin a psychological-cum-homeostatic mind shift to the financial realities of the calendar.
Whether one is aiming to create an emergency fund, save for a vacation, or secure a future, effective saving is fundamental.
Financial stability injects convenience into life. Life is easier led by the ability to meet our daily expenses; pay rent, meet the cost of mobility to work and afford meals. Financial goals are then set in as a necessity and a subject we should delve into.
It starts with setting precise and realistic goals. You must define your financial objectives against which you intend to work.
Be clear about whether you intend to save for a down payment on a house, establish an emergency fund, or even facilitate a vacation. This gives a sense of direction and impetus.
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Then, devise a roadmap of income sources versus expenses. With priorities well deciphered, allocate particular amounts for specific expenses such as utilities, debts, rent etc.
Assign a figure for savings, preferably 10-20 per cent of your income then track your expenses. There are a number of apps and tools for expense tracking, making it simpler to identify areas where it is possible to cut back and save more instead.
In doing this, we must leverage technology. You can set up automatic transactions from your regular account to your savings account.
This guarantees consistency in saving without having to depend solely on your willpower. Still, you must learn to exercise restraint and limit impulse buying.
Assess whether a purchase is within the plan and aligns with your stated priorities. Assign yourself a waiting period of say 24 hours before conducting a purchase. An audit of your habits and discretionary spending will reduce needless expenses.
Develop a pattern of what we can term shopping smart. At your shopping stores, always be on the lookout for discounts, cashback offers and loyalty programmes. Normalise buying generic brands since it would help save on groceries and other necessities. Then prioritise accrued debts. Debts with high-interest rates will adulterate your saving efforts, pay them strategically.
Explore investment opportunities and consider pursuing low-risk frontiers such as index funds or even retirement accounts. These are essential in growing your savings. Whichever option you settle for, seek proper advice from industry experts.
Practise discipline and a requisite level of patience. To make informed decisions, learn financial literacy. There is an overflow of knowledge from online resources, courses and books. Be there need, consider including your family members in the process. It is also important to nurture children into a saving culture.
A comprehensive saving plan is not actionable without discipline. In fact, lack of willful resolve makes even this article what they say in street language, 'Story ya Jaba'. It is upon us to break the circle of lack in our families through a dedicated pursuit of financial sufficiency, saving is one enormous step. Start now, lest my piece remains only 'Story ya Jaba!'
-The writer is a PhD candidate on leadership and governance