Develop smart financial resolutions for 2014

They say failure to plan is planning to fail. Having resolutions for the New Year is part of a good planning habit and all individuals and households ought to have theirs. Even the government has already planned its budget for the year 2014 and has a strategic policy in place, Zim-Asset, to guide what it intends to do for the next five years. What are your financial resolutions for 2014?

The New Year is an ideal time to forsake bad financial habits, to create better ones to ensure prosperity in the coming months. The opening of the curtain of the year 2014 should see you taking a good hard look at your financial mistakes of the past, resulting from habits such as addiction, impulse buying, overconsumption, just to mention a few. Just imagine how broke you became as a result of those habits. Do you want to repeat that in this New Year?

Your motto for the year 2014 should be to save more. You should utilise every opportunity you get to save even if it’s just a few cents. You can only be able to save when you do something about your habits.

Take addiction for example; it will be like a tax on your payslip if you don’t tame it. If you are addicted to beer, to the end that you have to drink at least five pints per day, then you are assured that at least $150 of your pay goes to beer every month, if you don’t change that habit. That’s at least $1,800 per annum going to alcohol. Are you willing to spend that much on alcohol in 2014, or you would rather use that money to enrol for a professional diploma to strengthen your CV?

It is important to exercise prudence in spending, and to ensure that you buy only what is necessary and avoid wastage. This is the year to compare prices.

There are a lot of price variations for similar products, and if you don’t research well you will always pay more for less. My Christmas shopping has given me many insights about how the price differentials for an identical product can be as much as $2. We are a low income country and should therefore save every cent we can.

Saving does not only give you the opportunity to invest, but it also abets the economic situation. No meaningful household investment is taking place right now because people are consuming every cent they are getting. If more funds were available in savings, lending rates would come down and productive sectors would be able to access concessionary loans to increase capacity and create jobs. The solution to our economic crisis begins with you.

You should be smart enough to avoid investing in schemes promising extraordinary returns, as these will only waste your time and deter you from focusing on real issues. There are many schemes I have heard of that guarantee doubling your money in a short period of time. Don’t fall for them, as most of them are either illegal or will rip you off your hard-earned income. Last year we have seen many people falling for the Ponzi schemes that were being established in town and ended up losing a lot of money.

Be sure to have your health insurance fully paid up to date, and that other things like your car insurance and other taxes are paid on time. Keep a tracking mechanism to remind you to pay up in time. You don’t want to go through the embarrassment of being pulled over by the traffic police and be fined for an expired vehicle insurance.

It is also very important to create a contingency fund as you can never be sure what life will throw at you. You can never prepare for things like death in the family, theft of gadgets, visits by family and other unforeseen circumstances. Be therefore ready for any eventuality such as this by stashing some money in an emergency fund.

Post published in: Business

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