7 Tips to start 2024 on solid financial footing

New Year’s resolutions are good, but they need to become habits if you want to create lasting change. Followed consistently, the seven suggestions below can set the stage for financial prosperity.

Tip: Use our handy budget calculator to understand your monthly expenses.

1. Spring-clean your finances

Financial planning can be overwhelming at the best of times, but even more so after the festive season.

“Coming back from a family trip to face credit-card debt and a 9% school fee increase can be a real challenge,” says Darryl Bennett, a wealth adviser at Sasfin Wealth.

January is nevertheless an excellent month to “spring-clean” your finances, adopt a fresh, organised approach to money management, and set your financial priorities for the year.

Start by revisiting your financial goals, think about what you want to achieve during the year, and develop strategies to start an emergency fund, pay off debt, or fund major purchases in future.

2. Check your credit report

Knowing your credit score helps you understand your existing credit, and is a step towards achieving your financial goals.

Reviewing your credit report will give you insight into financial possibilities for the year ahead, such as qualifying for a favourable interest rate on a loan.

3. Review your insurance cover

January is an excellent time to review your insurance cover, according to Paul Menge, an actuarial specialist at Momentum’s Investo Product Solutions.

Menge recommends getting quotes from several insurers at the end of the year. “The aim is to make sure you’re still getting the best possible deal from your current insurer,” he says.

Bennett notes that an independent financial adviser can analyse your short- and long-term cover to identify issues and opportunities. “Be careful of insurance salespeople who only sell for one company,” he cautions.  

4. Consult the professionals 

If you have a financial adviser, it’s a good idea to set up a meeting to ensure your savings and investment strategy is still in line with your financial needs.

“It’s also wise to speak to a healthcare consultant who can advise you about medical aid and medical insurance. If you want a hospital plan only, ensure it’s accompanied by gap cover, which is generally very affordable,” Bennett recommends.

5. Overhaul your budget

January is the perfect time to start budgeting afresh, with energy and resolve. However, ensure your budget is realistic, or you won’t stick to it.

“Update your spending plan to ensure you know where your money is going,” says Menge.

“Review your subscriptions and memberships, and discontinue those you don’t use enough to justify the cost. Redirect any funds to servicing debt or setting up an emergency fund, and to saving in advance for expected expenses such as a licence renewal or car services.”

6. Top up your retirement annuity

Bennett says February is a good month to top up your retirement annuity (RA), if possible, ahead of the end of the financial year.

“You can make a pre-tax contribution of up to 27.5% of taxable income, capped at R350,000 a year,” he notes. “You will get a tax refund, and it’s also a great way to save for retirement.”

7. Update your will

Consider updating your will in the new year, especially if you expect your personal circumstances to change, for example through divorce, advises Bennett.

Legally, you have three months to alter your will after your divorce, so do so in the allotted time if you want to change your beneficiaries. 

Be sure to stipulate guardianship details for any minor children, Bennett adds.

Tip: Is debt holding you back from achieving your goals? Consider debt consolidation.