Welcome to September, we’re officially in the ‘ember’ months of the year, the point at which the year typically seems to race to an end. At this point, most people realise they haven’t done as much as they planned to and begin to intensify activities, so they can still meet their goals and plans for the year.
One of the areas people tend to struggle with is in their finances. Most times the year starts strong with grand plans for savings and investments. Unfortunately, a number of people set ambitious financial targets without putting the necessary plans in place to make it happen.
Take Jane for example. She’s been working for about 10 years at a multinational company. She’s fortunate to earn a very good salary, so she’s really had no financial gaps to cover. But the thing is she’s been dreaming about starting a Master’s programme for a while. At the start of the year she decided this was the year she would start saving toward this goal and she’d given herself a target to save 50% of the money required to fund her Master’s and cover the balance next year. Good idea, right?
But beyond the idea and the target Jane didn’t have a plan in place.
So, when she saw the jewelry, she bought it. When someone asked for a loan, she obliged. Her social life didn’t change in any way so the meals out with friends, also ebi purchases continued as always. The wardrobe updates continued. After all she could afford it, and she still had many months in the year to make it happen.
Until she got to August and realised there was no way she would be able to make her target by the end of the year without making drastic lifestyle changes. So now she’s in ‘hermit’ mode and intends to just go to work and back, no socialising that will cost her any money. She plans to cut back on buying lunch at work and take food from home. She’s now asking herself what financial instruments she can put a portion of her salary in so at least there will be some addition to her income. All good ideas, and all things she should have done as soon as she set her target for herself at the start of the year.
You see, putting a tangible plan in place early enough would have helped her see very clearly:
- How realistic her target was in the first place? There’s no point trying to save an amount that would cripple you in the process.
- The specific adjustments she could make in her spending patterns early enough to get to her goal
- What options she could explore for investments so the money she was setting aside would gain some interest
- If she needed to partner with others to help raise the funds e.g. join an investment club.
- How she could create additional sources of income beyond her salary
- What sort of financial education she needed to acquire and what tools/apps she could use to help her achieve her target.
Jane left it too late and is now rushing to the finish. You don’t have to do the same.
Join me over the next few weeks where we’ll look in more detail at achieving your financial goals. Don’t wait until December 31st or January 1st, start planning your 2019 early enough and start strong.