The start of a new year always brings with it the hope of a better and more prosperous future. It is that time of the year when we draw up long lists of things we want to change, things we want to improve and things we want to start and stop doing. Often you find sporting activities, getting fit or into shape being somewhere at the top of the list. However, your Chief Money Man wants to argue for money matters to be amongst those top resolutions as well and to help you on your way, I have put together a list of my 10 essential money things to do in 2019.
Should you do all of the money things on the list? Of course you should, but knowing just as well as the next person that resolution lists always start our strong and then tend to wither as the year goes by, I’d say that if you manage to do just one or two things and do them well during the year, then that’s a good enough start.
Let’s look at the list!
1. Re-balance your portfolio
The decline in the markets over the last 30 days, makes this the number one thing to do this year. I don’t know if the markets will rebound or whether they stay sideways or down for the rest of 2019, but I do know you need to be re-balancing your overall portfolio on a regular basis.
Portfolio re-balancing is a great way to ensure you stay diversified at an adequate level and also, taking the time to go through your portfolio often brings ideas of things you need to change.
This may seem like quite a task if you have a complicated portfolio, that is already widely diversified and across multiple accounts, but it is worth it in the long run.
So don’t wait until tomorrow and get to re-balancing your portfolio now.
2. Make a budget
Do you even have a budget? Do you rather just spend your money and mentally check off your balance and then keep a close eye on your bank accounts to make sure you make it through to the end of the month?
If so, stop!
Budgets are an essential tool to keep track of your spending, make sure you don’t blow through your paycheck right away and helps you build financial discipline. Budgets also help you save more as they quickly point out your ability to save.
Budgets can be as simple as an excel spreadsheet or something written down on a piece of paper. You don’t need to have some high-tech budgeting software. Just make sure you know your fixed and variable monthly expenses and monthly income.
There are loads of websites that offer free template downloads, so just go google it and get started.
3. Stick to your budget
Once you’ve taken the time to build a budget, don’t be like most of us and look at it at every few months, nod your head, tell yourself you must save more and then get onto making dinner or something like that.
Good budgets are ones that you follow and stick to. It is of zero use if you budget saving 250$ a month and then go into overdraft every month, because of that extra night out or that new VOD you just had to rent.
Budgets are meant to be followed and that requires discipline. Make sure you stick to your budget this year!
4. Pay off high interest debt
The US 10-year bond rate is 2.6%, while that of Germany is 0.2% and the UK comes in at 1.2% currently. We are in a world of low interest rates and have been for some time. That means there is little need to have high-interest debt.
It may be that you have old high-interest debt that you’ve just hung onto and are still diligently paying it off. If you can pay off more, then definitely do that right away or make a plan to pay it faster. If you can renegotiate it, then definitely do that and if you can pay it off by taking a lower interest loan in its stead then do that as well.
Make 2019 the year you get rid of as much high-interest debt as you can.
5. Make sure you have a big enough emergency fund
Emergency funds are personal animals and even though there is enough data out on the internet on the subject to fill up a life-time of reading, I don’t think there is one rule that fits all people.
The level of your fund – and you really do need one – depends on your personal circumstances like your job, where you live, your fixed and unavoidable monthly expenses and any upcoming payments or commitments that you need to meet. Your fund should be dynamic.
If you don’t have one, start putting one in place right away.
If you have one, make sure you take the time during January to reevaluate the level of your fund and put in place a plan to get it to the level you need it to be.
6. Consolidate all your investments, insurance and banking information
A lot of you may have different types of investments, with different companies and different insurance companies and separate banks. If that is your case, do you know where all of the documentation for all those investments, insurance and bank accounts are?
If something was to happen, would someone else be able to pull them altogether and trace everything? If the answer is no, then do something about it!
Get an online cloud account and scan all your documents into one neat and tidy folder. And share the details with someone your trust, your wife, your husband, your parents, your child, your lawyer, whomever, so that in case of an emergency, someone can reconstitute everything.
7. Plan for something fun to do this summer and make it happen
Work can be fun, but it can also be something that tires you out. More often than not those late hours or tough deadlines take it out of us. We start feeling the fatigue and once our mind and body start getting tired, we know we need to take a break.
What’s even better than taking a break – knowing you are going to take a break. Looking forward to something is a great motivator. Knowing that there is light at the end of a tunnel helps get us through that tunnel.
So create some light for yourself and plan your summer holidays now. Better yet, book those flights, train tickets or anything else that means those plans get locked in.
You’ll see that knowing you are in for a fun time this summer will help you pull through the remaining winter months with much more ease.
8. Understand where your career is going
Do you know why you’re doing the job you’re doing? What is it about your career that you love, what do you think could be improved and what would you change if you had the chance? And what is your next job going to be?
If you don’t know the answer to these simple questions, then you need to take a step back and think a bit harder about your career. These questions are essential to help you understand your career path or better yet, your career probabilities.
When you know WHY you are doing what you are doing, it opens up a whole new understanding about your career. I don’t mean, “I work for money”. That isn’t a why; that is just the consequence of you giving your time and brain (or body power) to the service of a company. You get paid for your work.
The why is what’s behind you working for the company you work for, doing the job you do, being in the career you are in. The absence of a why could point to the need to be changing jobs .
Knowing your why is a wonderful thing as it helps you understand what it is about your job and the company you work for that gets you up in the morning and gets you boosted through the day. People who have whys that are aligned to the whys of their company find themselves, more often than not, in the zone. Check out Simon Sinek and Start with Why for more information.
9. Do one thing for the planet
This isn’t exactly a direct money thing, but it will end of being one. The plastic problem the world faces today is a real pandemic that needs to be addressed. This isn’t a problem that the world governments can fix all alone. However, it is something that you can do something about. In this case, every little thing actually does help.
But it doesn’t need to be tackling plastic, you get to choose whatever little thing you think could be good to help the world on which we live. Just do one thing this year.
10. Save more
Building wealth can come through a number of methods however a tried and tested one if definitely saving more. So, take up the Chief Money Man 2019 savings challenge and increase your savings rate by an extra 5% each month.
That may seem like a small incremental movement, but over time an extra 5% can take years off your eventual retirement date, so don’t waste time and start figuring out ways to save more in 2019.
Have a great year and happy to have you all along for the ride.