5 Money Moves to Make Before 2020 – Nimi Akinkugbe
Written by Smooth FM on December 18, 2019
The end of year is always a good time to take stock and to prepare oneself for a new year. Personal finances need periodic attention. With only two weeks left of 2019, do find some time to get some clarity around your personal finances. Of course, with the spending frenzy, all the parties and activities, it is easy to put aside such a mundane task till next year, but don’t procrastinate.
Keep your financial documents organized. An important part of managing your personal finances is keeping your financial records organized. Do you know where your important documents are? Are you a hoarder that keeps documents for years and years just in case you need them? Is your desk cluttered with old bank statements, bills and receipts? Avoid leaving sensitive documents lying around for an unscrupulous visitor to rifle through. Your financial information is confidential. When your trash is picked up, you don’t know where it ends up–it can become prime targets for thieves.
Deal with your debt. Are you in debt? Do you have a bank loan or did you borrow from family, friends or your community club? List out all your debt at the end of the year so that you know exactly what your obligations are and build in a plan to address this in the new year. Do you know your credit rating? Your borrowing behavior affects the lender’s attitude towards you, both now and in future. If you have had a good credit history, you may be in a good position to access credit.
Calculate your net-worth. Ideally, your net-worth should be increasing each year showing that you are making progress and that your financial decisions are actually working. By tracking your assets and your liabilities, you have a fair indication of where you stand financially. If you can, compare it to your net-worth this time last year to see how it’s changed; what has worked and what hasn’t. This information can influence your plans for 2020.
Start saving. How much money do you have in the bank? How much did you save this year? Ideally you should have at least six months to twelve months of your monthly expenses saved in short-term money market securities. If you have no emergency savings at all, and you suddenly become unemployed, or need to pay important bills, you could be very vulnerable and this is an area you should pay attention to.
Check in with your investments. Look at your investments; what are their prospects? What are the returns on your stock, bond, or mutual fund investments? Are you satisfied with their performance or is it time to make some changes? Should you continue to hold them all? Should you take advantage of a dip in the market to buy some more shares since some are trading significantly below their true value? Do you have property? Is it earing decent rental income or is it empty? Is it in good condition?
Is your portfolio of the right mix to make it possible for you to realise your short, medium and long-term goals? As your circumstances change, there may be a need to review things and make some adjustments. Find time to chat with a professional financial advisor who will guide you regarding investments that match your risk appetite, financial standing, goals and time frames.
Contact Nimi on https://moneymatterswithnimi.com/ and listen to Nimi on Personal Finance on Smooth 98.1 Every Wednesday at 5;15pm