Setting financial goals can help us take control and feel more confident about our decisions and the direction we are taking. It is easier to achieve our goals if we know them in advance. Here are some financial goals we can aim for this year:  

 

1. Create a budgeting habit

Budgeting is the process of creating a plan on how to spend our money. Creating a budget will help us  achieve the other financial goals we’re working toward—whether that’s getting out of debt, saving for retirement, or investing.

 

2. Create a saving habit

Becoming a saver is the foundation of financial success. Until you make saving a habit, all other financial goals will be difficult to achieve. One of the best ways to get used to saving, is to start small and then gradually increase your efforts.

 

3. Build an Emergency Fund

Emergency funds are intended to cater for unforeseen expenses. They create a financial buffer that can keep us afloat in time of need without having to rely on credit. Typically, it is recommended that you save between three to six months of expenses in your emergency fund. But start small and work up to this goal.

 

4. Reduce your debt

While it's possible to live completely debt-free, it's not necessarily practical. When deciding on a strategy for reducing debt, it is important to firstly distinguish between good and bad debt. On one hand, Good debt is generally debt towards an investment such as education or home ownership. It is often also low interest debt. Bad debt on the other hand, is generally for depreciating items and often carries high interest rates. So when planning to reduce your debt, it is advisable to start with the “bad” debts such as credit cards, mobile loans and consumer loans.

5. Manage your Risks

 

Everything we do involves some sort of risk. With some of these risks, there’s only so much we can do about them. Our aim should be to minimize the financial risks we expose ourselves to. Where we can, we should avoid risk altogether else we should transfer it via insurance (Health, Life, Disability, Motor, Home, etc.), share it (by spreading it among more than one person), or accept the minimal amount of it possible.

 

6. Educate Yourself

Make it a point to learn more about how to manage your money. Nowadays there are endless resources available online that can help us upscale ourselves. Financial literacy is important as it equips us to be efficient with our finances in such a way that we can accomplish more goals and be less susceptible to schemes and scams that will drain our hard earned resources.