12 PERSONAL FINANCE GOALS TO CONSIDER FOR 2020. HOW FAR CAN YOU PUSH YOURSELF?

The new year is around the corner. Once again, it is that time of the year when many people resort to making resolutions of what they want to achieve. Well, I personally have reservations about the resolutions buzz that surrounds this time of the year, yet actions never see it through the end of the first quarter of the year. By mid-February, most people will have forgotten about their resolutions and back to business as usual before they wake up again in December to lament or claim that the following year would be their year. My belief is that every year can always be yours if you act. Just get hands on and you will see things happen. I am hoping that you, the reader of this article will be among the few who opt to put in effort to achieve what you wish for.

One of the areas that people tend to struggle with is bettering their finances. As a financial literacy trainer and a person who has interacted with many people about personal finance, I know that most people do not find it easy setting and sticking to personal finance goals. We can do better in the coming year. Before that, now is the perfect time to reevaluate your financial goals. Have you started thinking about what you want to achieve financially in the coming year and decade?

There are so many steps you can take to improve your finances, no matter if you are dealing with a lot of debt or are debt free. We all have room for improvement, and we should never fail to set financial goals for ourselves.

Take this time of the year to commit to improving your finances significantly. No matter what stage you’re in, here are 12 personal finance goals / aspirations to consider.

1)     Set and commit to long term goals

There are so many financial goals that we want to achieve and many of us are always looking at achieving them now. But what are your long-term financial goals? Every financial decision you make will impact your financial future. So, it’s important to know what you would like to achieve over the long term so that your other goals are aligned to that.

Your long terms goals will always differ based on your aspirations as a person and what your circumstance are. Maybe you want to make sure that you retire at a certain age, say 45. Maybe you want to start a large family. Want to go back to school? Or travel the world? Whatever your long-term financial goals are, they should be big enough to keep you motivated along the journey

Endeavor to make this coming year and decade a great one by committing to improve your finances, whether it’s one thing or everything on this list that aim sharing. Keep in mind your long-term goals to motivate yourself in the process!

2)     Educate yourself about money

I personally consider this one of the most important goals that you can and should set for yourself in the coming year. The best things you can do for yourself financially is to educate yourself about money.

Attaining knowledge is the best decision you can make. Let’s face it - we all know the basics of personal finances – debt is bad, you need to save for the future and the only way to financial freedom is making more money. Taking time to teach yourself will help you to make the best financial choices for you and your family.

The best news is that there are several thousands of resources at your disposal. You don’t need to go get a finance degree to grasp the key concepts of personal finance. You can read some of the hundreds of personal finance blogs and books to get you started. How about you consider attending some of our Personal Finance Mastery Trainings that we have committed to conducting periodically. I commit to also share my knowledge occasionally through personal finance related articles.

3)     Eliminate consumer debt and become debt-free

 I have recently had chats with many people who are choking with debt. Some of them are nearing retirement and are worried about how their retirement will look like. They will most likely continue to hustle yet retirement is ideally the time to enjoy the fruits of your hard labour, Becoming debt-free might not be something you can accomplish over the next few months or even in the next few years, but the more debt you have, the higher of a priority it should be to get it paid off. With debt, you will always be a prisoner whether in cells or not.

Think about what your life would look like without the weight of debt. You wouldn’t owe anyone anything. Your money is strictly yours and you choose what to do with it. In the new year, make it a point to work towards being debt free.

4)     Plan to Avoid Future Debt

 If you are already debt-free, how can you stay like that? Look ahead to the future. What will you be needing to save for? Will you need a new car in a few years? A house? Plan to go to for a master’s degree. Well, I don’t know what you will be up to.

Map out a plan to figure out how you will be able to afford things in the future without taking on an extra debt. Remember, making debt an option means that you are giving up your freedom.

5)     Purpose to Spend Less

 Ohh! How sweet it is to spend the fruits of your hustle but how fast will it get you to your goals. The fastest way to reach financial freedom is to spend significantly less than what you earn. Where can you cut back on your spending? That is the question you should be asking yourself.

Look at your budget and compare it to what you spend in a month. Are there things you can cut out? The more spending you can eliminate, the faster you can pay off debt or build savings.

You must get creative and in depth with how you can save. Can you cut on TV subscription? After all, you always subscribe to the premier packages, yet you are never home to watch the TV. Shop around for cheaper insurance packages? Go out to eat less? Figure out how you can spend less and commit to it. This will get you to your financial goals faster.

6)     Make More Money

I know the previous point talks about spending less but you must remember that no matter where you are on your financial journey, it never hurts to have additional cash. You need to think about how you could make extra money to supplement your income.

Is asking for a raise at your place of work an option? Will you consider finding a higher paying job? Or will start a side hustle, like blogging, freelance writing, or something else? Well, whatever you choose to think about is up to you and your abilities.

Any extra income you make will improve your financial goals. Make it a goal to earn more money this coming year and see how much extra you can make! I will wait to read your stories.

7)     Build and grow an emergency fund

 They say that an average Ugandan is one major medical bill / hospitalization away from bankruptcy and financial distress. Why is it so? The answer is simple. The average Ugandan is not prepared for an emergency. A healthy emergency fund is necessary for financial success. Why? Because it covers you in times of trouble and prevents you from taking on major debt.

Can you imagine losing your job? Having major medical expenses? How would you pay for that?

In tragic times, the last thing you want to worry about is money. So, take this year to build up your emergency fund to a level where you are comfortable. If you’re just starting out, a UGX 3,000,000 emergency fund will help you immensely little as it may seem. And you don’t have to start with the whole of it. You could choose to put aside UGX 100,000 per month towards your emergency funds. It will grow over time if you are focused and patient. The ideal situation is to get to the point where you could cover 3-6 months of living expenses at the minimum should something bad happen. Decide how much you want to put a side to get to this level faster.

8)     Start a No-Spend Challenge

 Are you ready to push yourself when it comes to your personal finances in the next year? Then look no further than trying a no-spend challenge. A no-spend challenge is just plain as it sounds. You stay away from spending any money you don’t have to. This means no extra clothes, no social events, or eating out.

From experience, this is enormously tough, but trust me the results are worth, and it is very effective. The challenge will help you realize how little money you need to get by.

If not spending at all sounds or seems too severe for you, try applying a no-spend challenge to one area of your life. If you like eating out weekly, put a ban to visiting the restaurant and prepare your food at home. If you like shopping, consider putting a ban to just that.

Alternatively, can try to apply the challenge over shorter periods of time until you are used. For instance, you may choose to apply the No spend challenge for just a month to test your resilience.

9)     Perfect your professional skills

Improving your professional skills is just one of these initiatives that will help you to reach your financial goals faster. By enhancing your professional skills, you aren’t just bettering your work, but you are improving your finances.

Continue to develop both the technical and personal skills you need at work. The logical is not hard. The more you grow your skills, the more potential you must earn more money. And not only that, but many of these skills translate into your personal life.

For example, if you are a skilled negotiator, you have the potential be able to save hundreds, if not more, money per year by haggling. If you work at your organizational skills in your work life, that can also improve your personal finances.

10)  Build Your Retirement Account

Three out of five adults I host in my financial literacy sessions say they are worried about their retirement life because they do not have enough savings to cater for their old age. Others have totally nothing and the worries are visible on their faces. That said, we must acknowledge that everyone is at a distinct stage of saving for retirement. Some of us are trying to balance saving for retirement with paying off debts and educating our children or siblings. While others have been saving heavily for retirement for a while.

Consider taking some time to really evaluate your retirement savings account and compare where you are currently to where you want to be. Do you have the best retirement package accessible to you? Once you have done that, commit to putting any extra money you make into your retirement savings. Do this every other year and you will tell about the results in about 5 years.

11)  Cut Back / Rationalize your belongings

 Down scaling your belongings might not save you any money immediately, but it will gradually help you to get your personal finances in shape. How? It forces a lifestyle adjustment that will save you so much in the long run.

Take time to think about everything you own. How much did you spend on it? Do you have to pay to maintain it? Well, if you don’t truly enjoy everything around you, then it’s time to let go. By adopting a more minimal and simpler life, you will save money and think twice while making a key acquisition. As a bonus, you can sell those extra things laying around for some cash!

12) Start a savings challenge.

Why did I even write this as number 12? It should have been the first on the list. As we get into the new year, I would encourage you to take up a savings challenge that would see you stack some more by the end of the year. A savings challenges serves as a motivator for you to save even when times are hard.

There are many ways of how you can take up this challenge. I would encourage you to consider the popular 52-Week Money Savings Challenge where you will see your self-putting money aside each week for up to 52 weeks (one year). The way the challenge works is that you would increase your savings every week by a certain amount until the 52 weeks are done. My next article will be exactly about this. Look out for it as I will break this down and share with you a customizable template that will guide you through the process. The challenge will explain how starting out with UGX 1,500 can make a difference to your personal finances by the end of the year.

As I close, I can say that you have the power to make the new year a great one by committing to improve your personal finances. You could choose one thing on this list or push yourself to take up everything. All in all, I encourage you to keep in mind your long-term goals and let them be your motivator in the process.

Written by Darious Nkwasibwe

Financial Literacy Enthusiast and Trainer

0781819477 / 0772122994

[email protected]

PS: Feel free to get in touch with me on the above contacts and we can discuss more. You can also send me an e-mail via [email protected] on matters of personal finance. I will be happy to respond.