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5 ways to navigate the impact of Covid-19 on your financial resolutions

5 ways to navigate the impact of Covid-19 on your financial resolutions

5 ways to navigate the impact of Covid-19 on your financial resolutions

By Opinion Time of article published 14m ago

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By Jikku Joseph

Our President will make an announcement any day now. ‘My fellow South Africans…’

The lives and livelihoods conversation will likely be central to his deliberations, as it should be and has been.

Something that may not be as prominent is the impact of Covid-19 on ordinary South Africans’ personal financial resolutions. Many may have started 2021, bright eyed, with an idea of their financial goals which, in the first month of the year alone, are at risk.

In only the first month of the year, the school year has already been postponed by two weeks and the Treasury seems to be considering increasing taxes to pay for much needed vaccines. All of these changes may have a considerable impact on people’s financial goals.

So being financially disciplined is more important than ever because predefined goals will be tricky in an unpredictable year. Rather than goals, it is better to think about money systems that we can put in place to ensure that we become financially stronger. A system here is a predefined setup to encourage repeated action. This will make our goals – whatever they may be – easier to achieve.

Here are five simple systems that we can put in place to build our financial strength:

Firstly, automatically track where your money is going. There are free apps that securely collect transactions from many different accounts and automatically categorise your spend. This will not only make it easier for you to see where your money is going, but also ensure that you redirect money to the things that matter most.

Secondly, automatically save for emergencies. Set up a monthly debit order that goes off immediately after you are paid, before you spend. You are much more likely to save if this is automated. Round up savings tools will also help here.

Thirdly, increase the amount you are paying on your highest interest debt. Every little bit you put towards your highest interest debt can have a significant impact on the amount of interest you pay in total and the time it takes to repay your debt. Find out what your interest rates are across your debt obligations. Everytime you pay off one debt, add that amount to your next most expensive debt.

Fourthly, update who you follow on social media. You are who you follow. The social media accounts you follow impact the view you have of the world and more importantly the view you have of yourself. Follow the accounts who inspire and inform you about becoming financially stronger and avoid the accounts that are all about living lives beyond your means.

And fifthly, batch adulting (read boring but important) and fun activities so that you are motivated to get your finances in order. As an example, make it a habit to review your spending weekly before you reward yourself with that bowl of ice-cream or the next episode of your favourite show. You will start to associate these activities and you are more likely to complete your adulting.

Together these five systems are a journey and not a quick fix. Slowly find your groove and then make realistic financial resolutions you can handle.

There are budgeting/tracking and investing apps that can make setting up these systems easier. They help you keep track of your money automatically and save and invest easily.

Rather than waiting for the delayed school year to start or taxes to possibly go up, add these systems into your lives to enable your financial resolutions. If you track your spending, save automatically, pay a little more towards expensive debt, surround your digital self with smart financial minds and reward yourself, you will be able to navigate the impact of Covid-19 on your financial resolutions.

We’re already one month into 2021. If you haven’t already, there’s no time like the present to start.

* Jikku Joseph is managing director at 22seven

** The views expressed here are not necessarily those of IOL.

Original Article

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