The plans of the diligent lead to profit as surely as haste leads to poverty. Proverbs 21:5
There is an increasing number of persons who have become stressed out about their personal finances. The new year presents a perfect opportunity to draw a line in the sand and make a fresh commitment to becoming financially healthy. Studies world over have shown that only a few people include anything about finance in their new year’s resolutions, but are instead, living life to the fullest. One wonders how this can be achieved when a lot of persons already feel broke and are living pay cheque to pay cheque. Additionally, we’re learning that stress, specifically financial stress, directly affects our health and well-being.
It’s my understanding, based on a few readings, that most resolutions are generally kept up to the second week in January. Let’s change that narrative, by crafting a clear attainable plan to meet our goals. Committing to financial health can be achieved in 2024 in four specific easy steps.
- Establish a list of your goals.You constantly hear about saving more, but we’re not just saving for fun. Having specific goals will improve your chances of success. Short-term goals are within two years (travel, pay off loan); mid-term are 2-5 years (buy a home); and long-term are five years plus (retire at 65).
- Create your two key financial statements: budget and net worth.This will get you organised and show your full financial picture: what you have, what you owe, and where your money goes. This is a struggle for a lot of persons but has tremendous value. The net worth statement is a snapshot of your total finances. Net worth equals the total value of all assets, minus the total of all liabilities. Put another way, net worth is what is owned minus what is owed.
- Compare your financial picture to your goals.Identify your strengths and weaknesses. Do you have enough saved to reach your goals? If not, can you pull some additional savings from your budget. Develop a plan to get from where you are now to where you want to be.
- Make an appointment to see a financial advisor. Completing steps 1 to 3 can be done on your own. Most persons, however, need some extra guidance. Simply stroll into any financial institution, based on an online review of the major financial companies in Jamaica, and make an appointment. Generally, there is no charge for these consultations. The sole purpose is to seek an advisor to help you reach your goals.
So, with that said, let’s add “become financially healthy” to our list of 2024 resolutions. On your mark, get set, go………………
