My Money Resolutions

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It’s officially 2020 and its time to pull out all the receipts from last year so we can plan for the new year. Personal finance is of the utmost importance to me as a young man in the world of work – this year we must ensure to stick to our money resolutions and continue being the amazing savers we aspire to be.

By Timothy Sithole | 09 January 2020.

Many of us like to welcome the new year by having resolutions that we feel are necessary to make us better people, or to have more interesting stories to tell. We plan for everything, including education, fitness goals, travelling, and so forth but we tend to forget the most important one, money resolutions.

Here are a few tips and tricks to help guide your personal finance as we start the new year:

January – I have heard all the complaints about this month from my parents when I was still a student and I thought it was a joke. This is when you think to yourself, “I should have saved a bit of money during the silly season”, yet the reality is that you didn’t. But it’s not too late to start planning for the long year ahead. Be like a Lannister and use this month’s salary to clear as much outstanding short-term debts as possible, prioritising the portions with the highest debt servicing costs. Now is the time to start thinking about which bad habits to cut down on, bearing in mind that spending on small luxuries add up over time.

February – You are probably still dealing with the aftermath of January, but this is the best time to put your savings goals into action. If you’re an inexperienced investor like myself, it’s better to invest in a tax-free savings account and seek to put in the maximum amount of R33 000 a year to avoid any penalties. However, if you know your ways around the market and are looking for new stocks and trades to invest in, check out our monthly ETF reviews where our wise financial analysts guide you on the best performing exchange-traded funds dominating the financial markets.

March – The storm should have calmed by now and it’s time to be proactive about your savings goals and find ways to preserve your money. Start with your short- and long-term insurance. Ensure that your goods and property are insured for the correct values and that any depreciating assets are accounted for and adjusted accordingly. A mere R50 saving every month will give you a total of R600 in 12 months that can be better used elsewhere or to top up your investments.

April – Ha Ha Ha, April Fool’s! But not with your money. This month it is important that you draw up a budget, which should get reviewed consistently to ensure that you are still in charge of your money. Avoid personal debt, overspending or being overly generous (stop sending those eWallets to everybody that asks, learn to say NO!).

May – Lord Eddard Stark believed in always being prepared, for winter is coming and it might be the coldest one yet. Your electricity bill is likely to skyrocket as we head into this season, so make sure you switch off all unnecessary appliances and get yourself warm blankies to cosy you up instead of overreliance on a heater. You will thank yourself for it later.

June – The coldest month of the year but my personal favourite, the warm hearty meals at home beat any plate that a restaurant can serve you. So, take time to chill at home with the family and spoil them with gifts that they will never forget, like sharing your profound wisdom on ways to save money.

July – This month is termed the “savings month” and the theme last year was #crazywaystosave to encourage youth, like ourselves, to better manage our money. The most important thing to do here is to abstain from unnecessary spending and know the difference between good and bad debt. Do not be tricked to spend money you don’t have, and remember, there are plenty savings vehicles that you can invest your hard-earned money in. Also take advantage of the tax breaks awarded to you, such as your pension fund or retirement annuities.

August – Perhaps employers should use this opportunity to spoil their female employees a bit and give them something special to celebrate women’s month and the amazing work they do. The Global Wage Report 2018/19 illustrated that women in South Africa earn 22.7% less than their male counterparts, and I cannot find a compelling reason why that is so. It’s the start of a new decade, let’s go 50-50 (I thought Mandoza had already told you this).

September – Learn to manage your own savings portfolio. An investment manager is a great asset to have when you are still learning but be sure to self-educate so you don’t get caught sleeping. Petyr Baelish was the master of coin, but at the end of his tenure, more coin was missing than he had invested.

October – The medical aids usually announce price increases for the following year to give you endless headaches that even their plans can’t cure. Make sure that you review your premiums according to your benefits and cut down on what you do not need. Also, ensure that you’re getting the necessary rebates from the taxman in the form of medical scheme fees tax credit (MTC).

November – This is the month where you take a long deep breath and start planning for the bonus you might be about to receive. Think about mature ways on how to save it, like supplementing your tax-free savings account or your retirement annuity. This is probably the best gift you can give yourself for all your hard work during the year. As per the 2019 tax season dates, you should have done your income tax filing by now, but if you are provisional taxpayer who utilises eFiling, you have until the 31st of January to get this done.

This handy site exists so it can help you find ways to be a tax-saving South African and one way to ensure that is to file all your documents on time, maintaining the utmost accuracy over any additional income to avoid any penalties that you would rather not have (a wonderful time for those invested in a TFSA!).

December – We’ve just come from this month; you know the financial mistakes you made. Use this time to reflect on 2020 and the progress you’ve made since the beginning of the year and start planning on how to make it even better for the following year.

Remember, “a man who says I am king is no true king” (Tywin Lannister), so do not try to impress people with money you don’t have only to be broke at the end of it all. Your personal finance goals must take priority in your everyday life. I hope this year, together, we can be a formidable force in reaching our financial goals.