NEW YEAR, NEW BUDGET
Set yourself up for success in 2022
There is no better time to overhaul your financial plan than at the beginning of January. And while it’s tempting to continue using the budget you set for 2021, money expert Vanessa Stoykov believes you should wipe that slate clean and start fresh.
“Every year you should absolutely set new goals and financial targets, otherwise you won’t keep progressing,” she says. “Once you hit your current goals, you should already be thinking of the next, and if you reach them earlier than expected, create more!”
Here’s everything you need to know about starting the new year on the right financial foot.
CONSIDER A LIFE PLAN
Vanessa likens a budget to counting calories, in that it’s incredibly tough to stick to. Instead, she advocates for creating a life plan.
“This is where you visualise what you want, and then think backwards in terms of how to get there,” she explains. “If you can see it, you can be it! Having a goal in mind helps you know where to spend, save or invest and is less restrictive compared to traditional budgeting techniques.”
GETTING STARTED
There are three simple steps to setting out a life plan, according to Vanessa.
“[First,] plot out everything you want to achieve in the different parts of your life, including finances, family, relationships, fitness and happiness, and think through where you want to be at the end of the year,” she advises.
Then, it’s about establishing a timeline. “For each goal, set smaller actions each quarter that will help you achieve that by December,” she says. “The key here is don’t set them monthly, as it will likely lead you to set unrealistic targets that will then make you feel like a failure for not achieving them.”
The final step is about acknowledging your wins. “Every time you hit a milestone, make sure you celebrate,” says Vanessa. “It’s too easy to only remember the failures you make, instead of taking time to enjoy when you succeed. Also, taking a photo of the goal each time you achieve it and saving it into a ‘Goals’ folder on your phone is a great way to look back at the end of the year and see how far you’ve come.”
ENSURE YOU STAY ON TRACK
Sticking to a life plan can be incredibly challenging as the path to your financial goals is paved with sacrifices. However, by staying focused on your goals you can ensure you stay positive throughout the year.
“Visualising where you want to be is an incredibly strong way to stick to your goals,” says Vanessa.
“This makes the sacrifices feel more worth it, and all the successes more motivating.”
IF YOU SLIP UP
While you may have every intention of following your life plan to the letter, the reality is that sometimes life gets in the way.
“It’s important to remember that you’re on a journey, and even when things go wrong, if you don’t keep moving towards your destination, you’ll never get there,” says Vanessa.
“Take each problem as a learning, focus on how far you’ve come and respect the process. Plus, don’t ever compare yourself to others, everyone has different goals and priorities!”
Never let slipping up in your financial focus be a setback to your goals, simply use it as an opportunity to learn for next time.