Money Management
October 25, 2024
The holiday season is here, and it coincides with the time most people get their annual leave. If you are one of those people, you must be wondering what to do with that much time. While there are plenty of activities to choose from, this small window can also be the time to set your financial house in order and stay productive.
The holiday season is a time for celebration and joy but can also be a time of financial stress. With the end of the year quickly approaching, now is the perfect time to take stock of your finances and ensure you are on track to meet your financial goals. This December, use your free time to get your finances in order and start the new year off on the right foot.
This article will explore ten things you can do with your free time this December to improve your finances, stay productive, and start 2023 on a high note.
Read Also: Top 5 Reasons Why 80% of New Year's Resolutions Fail
With the year coming to an end, it's essential that you establish where you stand financially. The end goal of this exercise is to help you figure out how financially stable you are. Additionally, by assessing your progress, you can plan how to start the new year on the right path.
To perform a financial checkup, you first need to review the fundamentals. And those include: your budget, emergency funds, debt-to-income ratios, net worth, and insurance. These financial components can tell you are trending in a healthy direction or that you need to adjust your finances.
You will know you are on the right path if:
If, after a financial checkup, you realise you are not on the correct path, you need to create a plan of how to change your financial mindset and save yourself from financial stagnation, or even ruin, before it's too late.
Read Also: Twelve Signs You're Financially Stable
Building and preserving wealth requires diversifying your investment and allocating your assets to increase returns and lower your risk exposure. But your portfolio will inevitably drift from its original form as the market moves up and down. After a year, it's possible that some of your investments would have performed well, others not very much.
Consider an investor with an investment portfolio worth Ksh500,000 at the beginning of the year. They had diversified their investment across six vehicles:
- Sacco: Ksh125,000
- Treasury Bonds: Ksh100,000
- NSE Stocks: Ksh58,000
- Equity Funds: Ksh45,000
- MMF: Ksh106,000
- Bank Savings: 66,000
Read Also: How to Build Wealth in Kenya Using Saccos
Towards the end of the year, their portfolio had changed shape despite growing to Ksh634,000.
- Sacco: Ksh146,000
- Treasury Bonds: Ksh128,000
- NSE Stocks: Ksh73,000
- Equity Funds: Ksh41,000
- MMF: Ksh126,000
- Bank Savings: 120,000
After a year, their portfolio has wholly changed. For instance, their bank savings went from representing slightly over 13% of their portfolio to almost 20%. For the investor to return their portfolio to its original form, they'll have to rebalance.
Read Also: 5 Investing Risk Factors and How to Avoid Them
In a rapidly evolving world, it's vital that you take steps to protect your career by upskilling and keeping up with the latest trends in your industry. Short courses allow you to refresh your skills and learn new ones that could help you earn a promotion or a higher salary. This is because they signal to employers that you are motivated and committed to self-improvement.
Short courses are easily accessible; you can take them from home, thanks to eLearning platforms. Depending on your budget, you can enrol for paid or free classes. Some platforms like Coursera offer free, high-quality, and accredited courses from Ivy League universities.
But it doesn't have to be all about work. You can also use your free time in December to learn survival skills like First Aid or take on a new hobby. You can take a swimming or dancing class. These skills can be highly beneficial, from improving your physical health and helping you develop new social connections to building a network outside your career.
Read Also: Soft Skills That Will Enhance Your Career
Networking involves building connections with other professionals within your industry. Networking has a lot of benefits. It can help you increase your visibility, advance your career, get mentorship, gain a new perspective, and, most importantly, build relationships.
After a long year of everyone being busy with their own things, December can provide a window to network and build/strengthen social connections. Here are some ways to do that:
Read Also: What Careers are on Demand in Kenya in 2022?
Having multiple sources of income is the best way to ensure you stay financially stable and achieve financial independence. It provides the fastest way to achieve your financial goals, build wealth and save you from the devastating effects of losing your primary income source.
You can spend your free time in December creating a business plan or coming up with a channel to create a new source of income. Here are some ways you to develop a passive income stream:
Leverage your Skills: This process will involve utilising your strengths. Look for ways you can monetise your talents and passions.
Invest your Money: Make your money work for you. Instead of saving your money in a bank account, you can invest it in income-generating assets and schemes.
Become a Freelancer: If you can spare a few hours a day, you can work part-time for individuals and companies on a contract basis online. You won't need to learn a new skill in most cases, as you can sell your existing skills on freelance marketplaces.
Start a Business: You can develop a business idea to help people solve problems or fill a gap within your community. Additionally, you can start consulting and assisting people by using your expertise.
Read Also: 8 Ideas to Create Multiple Sources of Income
Most people spend the last weeks of December creating new year resolutions to challenge themselves. Some people make resolutions to get fit, others plan to travel more, and others prepare for significant life decisions like getting married. Don't forget to set financial goals when making your new year's resolutions list.
When setting new year financial goals, it's crucial that you set realistic and achievable goals. For instance, instead of writing, "Save more money in 2023," be more specific and have a resolution that reads, "Save 15 to 20% of My Monthly Salary."
Additionally, you should set goals that reflect your current financial status instead of empty resolutions. Figure out what financial sins you committed this year and what bad money habits you picked, and create resolutions around atoning for them. If for instance, you had to take out a loan to pay medical bills, you should prioritise getting health insurance and building emergency savings.
Having annual financial goals has many benefits. They'll help you improve your money mindset, guide and inform your planning, and help you stay committed and focused on your priorities. They'll additionally help you achieve financial security in the long term.
Read Also: 10 Money Resolutions you Must Make in 2023
The benefits of having a budget can never be underestimated. For starters, it's the only way to perfectly balance your income with your spending and ultimately save money to accomplish your financial goals. On the other hand, creating an annual budget keeps you financially organised as you start a new year.
The first step of creating an annual budget is to record all your monthly income. The next step is to decide how much to save and how much to live on. To live within your means, you should be able to save at least 20% of your monthly income. You may want to cut expenses or increase your income if you can't achieve that.
Record all your typical monthly expenses to figure out how much you can live on. You should include all the fixed (rent, utilities, etc.) and variable expenses like food. Create a spreadsheet on how much you want to spend on all expenses and make adjustments to ensure you spend your money wisely. You also remember to set aside emergency cash when you run a deficit or have an emergency.
As you create your annual budget, develop a plan to automate your finances to help you stick to it. Adopt strategies to help you pay yourself and your bills on time. Finally, set a date to review and adjust your budget throughout the year constantly.
Read Also: The Ultimate Personal Budgeting Guide
Your time is one of the most precious resources, and you must put it to good use. And one of the best ways to do that is by volunteering for causes you believe in or support. While in most cases, it won't give you monetary benefits, volunteering can bring you happiness, and personal fulfilment, among other long-lasting benefits.
One of the top benefits of volunteering is that it offers a chance to network and build new connections. You can join charity drives and activities organised by your professional body, and you will likely meet new people. This will help you forge new relationships that can be useful in the future.
Volunteering can also help you learn new skills or refine your existing ones. Organising and successfully running a charity event can help you sharpen your leadership skills. You can add these skills to your CV, and it can increase your employability.
Read Also: Money and Me: I Need to Change My Friends Halfway in my 30s
To improve your career development and avoid all the pitfalls you are likely to encounter on your way to the top, you need the guidance of a mentor. A mentor is someone who can advise and support you as you gain experience in your field. While the primary purpose of mentorship is to help you advance your career, it can also influence your personal growth.
You can spend your free time in December scheduling mentorship meetings with experts in your field and attending mentorship programmes. Professional communities usually organise these events to educate younger members.
Mentorship programmes can help raise your confidence, get rid of impostor syndrome, and help you develop core skills like problem-solving. They can also open doors for new opportunities and expand your network.
If you can't find one within your area, you could search online for groups and forums focusing on your industry.
Read Also: 10 Signs You Have What it Takes to be an Entrepreneur
After a long year of chasing dreams and working, use your free time in December to rest. This is the type to unwind and reflect on what a year it has been. Find ways to reward yourself and celebrate your achievements, small and big.
Of course, this doesn't mean you should go on a spending spree or break your bank and fly to exotic destinations. Far from it. There's much you can do that can help you not just rest but achieve personal fulfilment. This includes simple things like spending time with your family, walking in the sun, and getting 8 hours of sleep.
And if your budget allows, or you are well prepared, don't hold back or punish yourself. Take a vacation, buy yourself some useful gifts, and enjoy yourself. This will help you get back into the game more motivated.
Read Also: Happy Holidays: 5 Pocket-Friendly Ways To Treat Yourself
Your December break might be short, and it will pass very quickly. But it is time that you won't get back. It can be tempting to spend it lazily, but you should push yourself to make the best of that little time. While you probably won't accomplish everything listed above, if you dedicate your time to four or five, you will have yourself to thank.
But remember that there is a reason you were afforded your December break. It is so that you can switch off, re-energise, and regain focus when you return to work in January. It's therefore essential that while you stay productive, ensure that you also rest and enjoy yourself.
.png){kind=small}
Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.
.jpg)
