Welcome to the second week in 2021.
I am very certain that I was not the only one who watched the events that occurred in the United States on the 6th of January 2021, as they unravelled.
The key takeaway for me was the fact that strong institutions or systems are fundamental to protecting a way of life.
As with government, strong systems are also required in our personal finance journeys. Like David asked several years ago, “If the foundations be destroyed, what can the righteous do?”
We are personally responsible for ensuring that we maintain the basics of personal finance – budgeting, spending less than we earn, saving a portion of our income, and investing amongst others.
Today, we will be discussing various financial New Year resolutions we can keep towards ensuring that our “financial foundations” are preserved or safeguarded.
I am aware that globally, people annually make New Year resolutions but seldom keep all or even one. Nevertheless, I will still encourage that we go through them and select one or two we intend to start or follow through in 2021 (and beyond).
- Set a budget and stick to it: many times, we tend to budget after we have finished spending the money and not before.
This year, we should resolve to budget ahead and strictly adhere to it. The trick is to ensure that we are thorough and realistic during the budgeting process.
- Keep a money journal: Many of us keep journals for sermons, gratitude and even to track our spending.
However, a money journal helps in exploring the patterns and emotions we have with money. This exercise does not have to be yearlong as it can be for a few weeks in 2021.
Below are some of the ideas we can explore whilst journaling:
- Impact of your childhood or parents’ relationship with money.
- Your attitude to wealth
- What you want your wealth legacy to be
- Wealth affirmations
- Areas of strength
- Areas that require more attention
- Pay your bills promptly: This requires little discussion. As long as you are capable, settle your debt or bills as they occur; especially to small businesses. Paying your bills or debt also helps free up funds for other activities.
Many small business owners will confirm that many of their debtors are those who can afford to pay for their services quickly but somehow never do. Let us make 2021 the year we change that.
- Choose a money day: This is a specific day of the month where you have money discussions with your spouse, children or circle of friend(s). The topics for discussion should cover as much as possible and will definitely vary from family to family.
The idea is to demystify talking about money and ensuring that such discussions are common place within the family or amongst friends. It also helps in tracking our financial resolutions.
- Safeguard your emergency funds: As we are all aware, emergency funds are meant to help us navigate financial emergencies.
In order to be able to do so effectively, we have to be intentional about avenues for warehousing them especially in the face of rising inflation and devaluation.
Near cash vehicles such as mutual funds and treasury bills remain viable options for such funds.
- Rebalance your portfolio: this entails ensuring that the various allocations within your investment portfolio are properly aligned with your age and risk appetite either by buying or selling off assets from time to time.
For example, when the founder of Zara, Amancio Ortega sold off some of his shareholding in the company to purchase commercial real estate. Remember he did this in the face of declining share price to invest in prime property that had good clientele like Apple and Facebook.
- Start Investing: For those yet to start investing, 2021 is a good time to do so, no matter how small.
Luckily, there are numerous options available – mutual funds (Naira or Dollar), stocks (Nigeria or US), Fintech (PiggyVest, Cowrywise) Agritech, Fixed Income (Treasury Bills and Savings Bonds) and cryptocurrency (for the adventurous).
- Start a side hustle or business: A side hustle is a business you do alongside your day job or during your spare time.
A major advantage of having a side hustle is the additional income it brings which helps increase your streams of income.
Growing one’s streams of income is always a good resolution to have.
- Give more to charity: In the words of late M.K.O. Abiola, “the hand of the giver is always on top” and one way of ensuring that is to practise giving; especially at times like this when many people require a helping hand.
Many will agree that giving brings joy, fulfilment and of course blessings from God. For those that can afford to do so, kindly increase your charitable giving in 2021.
Currently in Lagos State, it is safe to note that the virus is closer than ever. I am sure many of us personally know people that have been infected and survived, or some still battling the virus; as well as some that have unfortunately succumbed to this virus.
As such, we must continue to take personal responsibility for ensuring our safety and where possible, avoid large gatherings for now. It is also important that we remember that the vaccines are currently unavailable in Nigeria.
Keep washing your hands, maintain social distancing and wear your face masks in public.
I wish us all a wonderful week ahead.