However, bringing in bad financial habits into the New Year could see a repeat of 2021. How can you financially plan for the year ahead and what habits do you need to ditch? We have you covered with a few handy tips to get you started. 

Please note: 

The tips that are provided in this blog should be used as a general guideline and not seen as financial advice. Seeking financial advice from an accredited financial advisor can help you get a solution that will best suit your situation. 

Losing track of your budget

Your budget is telling your money where to go and what to do. Without it, your finances are lost. When it comes to managing your personal finances, setting a budget and keeping track of it is crucial. It's a habit that can save you from bleeding financially. It also helps you spot the areas that are causing you to bleed financially. Take a moment to carefully assess your bank statements to plan your way forward. Try to check your statements every 2-3 months to see how your budget is working and adapt it accordingly. Setting financial goals can also help you keep your eye on the target and avoid making impulse purchases.

Comparison

Comparison is the enemy of progress and the killer of joy. More so when it comes to financial planning. The reality is that your needs, responsibilities and situation is different from the next person. Even if you are in the same tax bracket. Having an honest conversation with yourself about what it is you want to achieve financially in the New Year and what you need to cut back on to get there is crucial. Speaking to a financial advisor can help you make realistic adjustments that work for you and your money without placing a strain on you.

Taking on too much too soon

When it comes to managing your finances, controlling debt and your standard of living will play a crucial part. South Africans are spending 75% of their income on debt. Furthermore, few understand the impact of the effect of the interest rate on loans and savings.

Aim to take on less debt by focusing on paying off any debt you may have. Always ask yourself if you must take on additional credit or a loan. If you are using loans and credit to pay for things such as groceries and clothing, you may need to seek debt counselling. 

Not brushing up on financial literacy

Financial planning is a juggling act that needs to be regularly adjusted to your situation. Financial literacy is probably one of the best tools you can use to improve your financial situation. There are many opinions and thoughts available online concerning financial literacy, therefore, always be aware of financial advice that does not come from an accredited financial advisor or planner.

There is no shame in admitting that you need to brush up on your financial skills. You can start learning the basics here. You will need to be patient with yourself and take things one step at a time, but starting is the best thing you could ever do. Remember to always learn and adjust each bit of information to your situation.