MANAGING THE NEW YEAR HANGOVER

[Sassy_Social_Share] The realities of the New Year and the consequences of the financial mess that happened in the festive season i.e. the New Year Hangover is creeping in. As you go through the pain, you will probably start thinking about what you will do different in 2013 aka New Year Financial Resolutions.  A smaller number of people will be reflecting on what they managed to do last year and how to improve on it or consider any adjustments.  Many of us however will be going through the exact same motions that we did early this year and the year before. The difference between the two groups is that the latter made a decision to start doing something. You can decide that this is the year that you join the group that is evaluating rather than starting from scratch.

So how do we start dealing with this New Year hangover? You can look at these tips and dismiss them, or decide to take even one action.

1)    Face the Facts: Where are you today exactly financially? What are your immediate obligations?  Don’t wait for the school to call you and tell you that fees is overdue.  Call them first to discuss possibility of a payment plan if you are finding yourself short. Come to terms with exactly how much money you owe and the value of what you own. Write this down somewhere. What is in front of you is the total result of your choices and decisions. You cannot move forward without being aware of where you are starting from.

2)    Cut down on one expense: Are you always thinking you don’t have money.  Cut down on just one expense. For example you could decide to start carrying lunch from home and save Kes 300 daily.  That’s Kes 9,000 per month and Kes 108,000 per year. That money could pay school fess, decrease debt or even be a holiday. In the larger scheme of things is buying lunch that important?  These small amounts that we are not aware of are the ones that add up.

3)    Save a smaller amount consistently: Rather than setting yourself up for failure by starting off with a huge amount, if you are still trying to come to terms with saving, work with a smaller amount. Being able to do this consistently for three months gives you a boost of confidence and impetus to continue but more importantly the much needed discipline for long term savings and investments is cultivated.  Too many of us are waiting for big amounts of money to save because that’s what we think will make a difference. If you can’t manage Kes 100, you can’t manage Kes 100,000.

4)    Learn and change the way you think about money: What you like or don’t like about your financial situation it is simply a way of thinking that created it. Just like you learn to walk, read, write, maths etc you have to learn money and how it works. In our case there are certain false beliefs we carry that have to be unlearned. Challenge yourself to attend courses/training and spend time doing your own research in this very important area.

Waceke Nduati

The author teaches personal financial management. Find her at waceke@centonomy.com or on twitter @centonomy.