It’s not often that the name of a year can reflect our ambitions, but with 2023 we get lucky. By slightly changing how you say “three”, you can remind yourself every day of this year of your goal to be free from money worries.
Here at Bayport, that’s exactly what we have decided to do. In 2020FREE, we are going to help and support each other, our customers, our friends and our family members to break free from those thoughts, habits and actions that get us into money trouble.
Where do we start?
To become free, you have to know what is holding you back. Here are three common ones:
- Most of us believe the problem is not enough money. If I had more money, all my problems would disappear. Sadly, in most cases this is not true. It’s the way we think about money that is the real issue. Breaking free therefore means understanding our own money mindset and the impact it has on how we plan our finances and spend our money.
- Some of us might feel that we don’t have time to first think about our money thoughts because we are drowning in a debt emergency. If that is you, your starting place has to be getting free from bad debt.
- Most, if not all, of us have some financial habits that do not serve us. Now is the perfect time to break free from those habits by replacing them with better ones. It might be something small, such as drawing R1 000 when you only need R750, and then spending that cash without thinking about it. And talking about spending without thinking about it: the one habit we must all commit to this year, is expense tracking. It is one of the most powerful ways to reveal your bad money habits.
Time for the Jan Plan
Now that we have looked at the possible money problems you might want to free yourself from, the next job is to draw up your Jan Plan. The Jan Plan answers two questions:
- What are your financial goals for 2023?
- How do you plan to achieve these goals?
The starting point is getting clear about your goals and dreams. You can compare it with ordering breakfast in a restaurant. If you just say you want egg, toast and a hot beverage, there’s no telling what you will get. Scrambled eggs on brown toast and a cup of tea? Or fried eggs on ciabatta with a cappuccino? The clearer your order is, the better your chances of getting what you want.
The same is true for financial goals. “I want enough money” is not a goal because it is too vague. How will you know when you have achieved this goal and how will you track your progress?
So, when setting financial goals for 2023 be specific, eg, “I will save R2 500 by the end of the year so that I can have peace of mind about back-to-school expenses next January.” There is enough detail in that goal to keep you focused, and by linking it to a feeling (“peace of mind”) you give it a powerful emotional hook.
Your goal can be more about a habit than an amount. For example, “I will read one article or listen to one podcast about how to understand money better every week this year” or “I will track all my expenses this year and do a proper budget recon at the end of each month.”
The second part of the Jan Plan deals with how you will achieve your goal/s. Try again to be specific, eg, “I will save R50 every week in my bank account or with my stokvel,” or “I will spend 10 minutes after supper to write down all the money I spent that day”.
Remember that your “how” steps, and even your goal, can change as the year progresses. For instance, you might get an increase at work, or your friend might give you her child’s unused school stationery, which means you no longer need to save R50 a week. Instead of just blowing the extra cash, take a moment to either change your goal (“I will save R1 000 to buy my child new school clothes and shoes”) or come up with a new one (“I will save R25 000 over the next three years so that I can renovate my bathroom”).
When you work on your Jan Plan, you might hear a voice in your head telling you that what you want is unachievable or that you shouldn’t even try because you will fail. Ignore that voice! If you listen to it, you will never free yourself to move forward. Instead, tell the little voice that you are ignoring it because you’ve decided to do things differently this year.
Are you ready for 2020FREE to be your year of breaking free?