Wallet Wellness: Your End-of-year Financial Checklist

We all need a mid-week financial check-in to make sure we are on track with our most cherished financial goals. That’s why we’re trying something new - every Wednesday on Money Weekly, its all about Wallet Wellness!

Starting this Wednesday, our editorial team at Money254.co.ke will be sharing one practical financial tip that is just enough to fit into the bustle of your busy week. We’re doing in this addition to our regular money-news-related newsletter, Money Weekly, sent every Friday.

We are thrilled to be embarking with you on this financial exploration which we hope will elevate your wallet’s wellbeing.

Let’s dive in.

MONEY254 TIP OF THE WEEK

How to Conduct an End-of-year Wallet Wellness Check

2023 has been a tough year with skyrocketing cost of living, unsettling tax changes, a shrinking payslip and record high fuel prices. This has definitely taken a toll on your wallet and you’d want to start 2024 on a high. 

Today, we explore a 5-step financial checklist we recommend you do before the year ends. 

Step 1: Review 2023 Finances

First, get a snapshot of where you are ending 2023 financially. You need to calculate how much you made through the year and where did that money go? How much are you worth in terms of assets and also, what liabilities are you carrying forward to 2024, plus a review of your financial habits so far.

• Assess your net worth.

• Examine your spending habits.

• Where did my money go? 

• Evaluate adherence to 2023 financial goals.

Step 2: Set Your 2024 Financial Goals 

Now that you know where you stand financially, what you did well and where you went wrong, use this information to guide your 2024 financial planning. You must adhere to clichéd but very instructive S.M.A.R.T goal-setting strategy. Your goals should generally be based on the five pillars of personal finance. 

• Earn: How you are going to make money; active, passive

• Save: Targets for your emergency, investment and sinking funds

• Invest: Determine your investment strategy, time horizon and what you need to actualise these plans including expert advice.

• Borrow: When used wisely, credit can be a springboard for your financial goals. Poor credit management can be disastrous too.

• Spend: Possibly the most important, how do you plan on spending your hard-earned cash in 2024?

Plus, think Beyond 2024: Align short-term plans with long-term financial goals to make sure you are being realistic about the time it will take for your plans to materialise. Read More.

Step 3: Update Your Annual Budget

With the annual inflation as of November at 6.8%, at the very least your annual budget has to increase by that percentage. But also, you need to readjust your budgeting to reflect the goals you set in Step 2 above. Plus;

• If you didn’t have one before, choose the right budgeting system. The 50/30/20 rule is good for beginners

• Create a debt repayment plan if you are in debt (Snowball, Avalanche, Consolidation).

• Automate Your Finances: Set up automatic transfers, automate bill payments, track expenses regularly.

Step 4: Update Retirement Plan

Planning for your retirement life is as important as planning for your today, and many Kenyans take this for granted only to regret in their later years. 

• Review your retirement goals

• Identify and address any deficiencies

• Adapt to changes in circumstances. Read More.

Step 5: Protect

Your 2024 planning is incomplete without a plan to protect all what you are working towards. You don’t want unforeseen events to derail and demotivate you. Your wallet needs protection.

• Protect your liquidity with a realistic rainy day fund goal

• Review and update your insurance coverage.

Bonus Tip: Have the Money Talk with Your Partner

Yes, indeed. If you are in a committed relationship, you don’t want to start 2024 when you are not on the same page about your finances. Have a candid talk with your partner about your financial goals for 2024 and plan to make it a great year together. Read More.

CONCEPT CORNER

Explaining Compound Interest

If where you keep your money indeed matters, one of the fundamental concepts to have a grasp of is compound interest. It is a powerful financial phenomenon that can help build your wealth faster. In this article, we explore how compound interest works and how to take advantage of its life-changing magic.

DEVELOPING A MONEY MINDSET

How to Embrace a Fresh Start in 2024

Don’t be afraid to start all over again, you may like your new story better! Indeed, especially during this season of skyrocketing cost of living, some of our plans may not have worked as we had planned. As you plan for your 2024, you shouldn’t hesitate to try something entirely new. This article explores some of the psychological games our minds play when we think about a fresh start, and how to overcome them.

MONEY254 #MONEYTOK

Improving your Income Potential

If you keen on improving your income potential, you may already know that money really is an exchange of value. The factors that affect your ability to make money are related to how you can improve your value in the marketplace. We take a look in our #MoneyTok below.

@money254hq

Money is a basic need, everyone needs it to survive but if you are not making enough of it, it can cause major stress. Putting in your be... See more

That's it for this first edition of Wallet Wellness! We hope these financial tips have added some energy to your mid-week hustle.

Also, don’t forget to download the Money254 App on the Google Play Store, and remember that we can help you compare over 300 loans, savings accounts, current accounts, and more if you’re thinking about your next product.

Cheers to your wallet's well-being,

Eric and the Money254 editorial team.