According to the Gregorian calendar, 1 January is the official start of the new year. January is named after the Roman god Janus. He is the god of gates and doors, beginnings and endings, and as a result of this, he is represented with a double-faced head, each looking in an opposite direction. He looks simultaneously to the past and the future.
This is something we to seem to do as the old year draws to an end and the new year is upon us. And with that backward and forward looking, comes those all too presumptuous new year’s resolutions. Generally, they involve an improvement of our health, either physically, emotionally or financially.
Look up any list of ‘most popular new year’s resolutions’ and you’re bound to find somewhere in the top three: ‘spend less, save more’ or ‘get out of debt and save money’. So instead of ensuring that these also make the list of ‘most commonly broken new year’s resolutions’, let’s rather get it right in 2016.
Do this first! Figure out exactly how much it is that you need to be putting away each month to get out of debt or to save that targeted amount. That should be the very first thing we do after pay day. Pay off our debt or invest our savings.
You might have heard Julie on Bruce Whitfield’s Money Show talk about ‘paying yourself first’. That couldn’t be more correct.
What’s left after you’ve paid yourself is what you have for the month. If you were suddenly retrenched, you’d make a plan. If you work on a commission basis and you have a bad month, you’ll make plan. In the same light – you’ll make a plan after you pay yourself first.
As an incentive, think of how rewarding it’s going to be when you’re finally debt free or when you’re rewarding yourself with whatever it was that you were saving for. Put a picture in your wallet that encapsulates that so you see it every time you open your wallet to take out your credit card. Perhaps put that picture somewhere that triggers that emotion before you even get to your wallet (in my case, next to my computer, so I see it every time I get those Yuppiechef emails). If it’s your new year’s resolution – surprise yourself – and keep to it!
Author: Gizelle Willows CA(SA) MCom Finance is Senior Lecturer in Financial Reporting at the University of Cape Town