Financial wellness resolutions for 2020 – 5 goals you should pursue this year and how to achieve them

Financial wellness resolutions for 2020 – 5 goals you should pursue this year and how to achieve them

– Chanelle Taylor (Director, Cornerstone Financial Planning)

From weight loss to travel plans, buying a house or starting a family, new year’s resolutions take every shape and form. Sadly, financial wellness rarely makes the list and Cornerstone Financial Planning is on a mission to get it at the top of your list.

One of the main reasons why financial wellness is not top of mind for many when midnight strikes, is because they don’t know what to do and where to start. Not to worry – we’ve got you covered with these top 5 financial wellness resolutions as well as expert tips on how to achieve them.

Compile a budget and stick to it

Understanding how, when and on what you spend your money is at the core of your financial wellness and the best way to do this is by setting up a budget and more importantly, sticking to your budget.

Get rid of your debt

Having too much debt can have a massive impact in your financial, emotional and even physical wellness. Kicking your unwanted debt to the curb will greatly improve your quality of life and financial wellness.

While ensuring that you continue paying the minimum of each account you have, you should start paying a little extra each month to the account with the highest interest rate. In easy terms, the higher the interest rate, the more expensive the debt is – therefore the quicker you get rid of the expensive debt, the faster you can start saving.

Start saving for retirement

This is a must, no matter how far or near you are to retirement. For some, this seams like a massive unnecessary expense, but you will thank yourself when you reach retirement age.

One of the best ways to save for retirement is with a retirement annuity or a pension fund (if you are working for a company that offers employee benefits). If you want more flexibility, you can also consider a tax-free investment account. Make sure you consult with a qualified and registered financial advisor first, before making any decisions.

Start an emergency fund

An emergency fund’s purpose is to cover your basic expenses if you lose your income – either due to retrenchment, injury or any other circumstance. Ideally, your emergency fund should be able to cover at least three months’ basic expenses. For example, if you need R10 000.00 a month to cover your bases, your emergency fund should be at least R30 000.00 strong.

This one is incredibly simple. All you need to do is set aside a portion of your income (not including your retirement savings) into a savings account. Put away as much as you can until you have reached your 3-month goal. Even after reaching your goal, it’s not a bad idea to continue adding funds to this account – you never know how much you’ll need when emergency strikes.

Ensure the safety and wellbeing of your loved ones       

As much as untimely death, disability and severe illness are not pleasant topics to discuss, it is an undeniable part of life. If you have anyone financially dependant on you, make sure they will be taken care of if you are unable to. Additionally, make sure that you are covered for the medical expenses that often accompanies disability and severe illnesses with a well-structured medical aid policy. By getting severe illness cover, death benefits and disability cover, you can ensure financial independence for those you love. Find out more about risk benefits by clicking here.

Your financial wellness should be your top priority in 2020 and well can help you reach these goals. For more information on our bespoke financial wellness offering as well as expert and qualified financial planning advice, get in touch with Cornerstone Financial Planning today on 011 794 6611 or email info@csfp.co.za

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