This Is 2018; Smart Financial Planning Starts Now
The beginning of a new year is often the time for personal and organizational projections, especially financial planning for the year ahead. Indeed, making a rock-solid financial plan should be at the heart of any smart year plan, as financial security has far-reaching implications for our lives and the organizations we operate in.
In the light of today’s economic realities, certain financial measures, such as budgeting, personal savings, savings for retirement, investments and mitigation of financial loss, have become measures we must prioritize as we lay out our year plan. Although analysts posit that the Nigerian economy has reversed the trend of negative growth, we must take into cognizance that this positive economic growth is yet to be sustained. The risk of sliding back into a receding growth regime still looms. For instance, the prolonged nationwide fuel scarcity that is currently ongoing may significantly spike an inflation growth in the first quarter of 2018. With these uncertainties, the need to take control of our finances through smart planning is ever more imperative. To help you do this well, we have highlighted factors you should consider as you push your plans for the year.
Know how your money flows: You cannot adequately plan for the year without first knowing how your money comes in and goes out. The first and probably most important step to take when planning your finances is to develop a budget with the details of your income and expenditure. Budgeting requires a lot of discipline as it can be difficult to track extensively. However, you need to determine a system that works best for you as the information gathered from budgeting over time will help you set your financial goals for the year.
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Get SMART with your goals: Smart goals are based on the S.M.A.R.T. goal setting methodology developed by George T. Doan in 1981. The SMART method is anchored on making Specific, Measurable, Attainable, Realistic, and Time-based plans. Use the data gathered from your budget to determine where you are and where you want your finances to be at the end of the year. Avoid setting vague goals like “I want to be rich” or “I want to make money”. Instead, set goals like “I want to save X amount by December to pay for my house rent”. That way, you can measure your success at the end of the year.
Manage your spending behaviour: Most of our financial outcomes are as a result of our spending habits, which, if not properly managed, can have a long-term implication on our financial goals. According to the National Bureau of Statistics, soaps and mobile recharge cards are the most common non-food items consumed by households in Nigeria, with 78.3 percent of households reporting a monthly average household expenditure of N17, 413, which accounts for the highest overall expenditure. Bearing in mind the average minimum monthly household income of N20,000 in Nigeria, this spending behaviour is an unhealthy trend for household finances. Study your budget and look for efficient ways for cost cutting.
Prepare for the unexpected: Life is full of uncertainties, and not having adequate protection for you and your family can wreak havoc on your financial plan, should you face an unexpected difficulty. It is important to identify the risks that can threaten your finances, such as having to spend unexpectedly to replace an asset lost to theft or accidental damage. In order to militate against these kinds of risks, it is wise to procure an insurance policy to protect your finances. This is because the onus will then be on the insurance company to compensate you or replace the asset in the event of loss. No matter your financial situation, insuring against the unexpected can help keep your plans for the year on the right track, should eventualities create a financial burden. With the launch of micro-insurance schemes, anyone, no matter their income profile, can now get an affordable insurance policy that suits their assets and income levels.
Have a savings system: The idea of saving when your current income is barely enough may seem absurd. However, saving is an essential way to financial security. A smart way to go about savings is to set aside 10%-15% of your income. That is, if you have a monthly income of N50,000, you should put away a minimum of N5,000 towards your savings. Also, because we cannot predict what the future has in stock for us, saving money provides that safety net in the face of eventualities. As you accumulate savings, your worries about financial responsibilities lessen, as long as you live within your means.
Smart financial planning gives you a sense of confidence and rest of mind, knowing that you have something to fall back on if you encounter unexpected expenses in the future. With Leadway Assurance, you have the option of planning your finances through our different savings plans:
- Personal Savings Plan: The Leadway Personal Savings Plan allows you save towards the future at your convenience. With no minimum contributions or rules about how frequent you make contributions, you can save however and whenever you want to. The Personal Savings Plan also has a complimentary life cover of N1,000,000.00 or half the premium account balance for policy holders aged 60 years and below. The plan also provides a cover of N200, 000.00 if you fall victim to certain illnesses or become permanently disabled because of an accident.
- Leadway Savings Plan: This policy allows you to make savings contributions, which accumulates interest at Leadway Assurance’s rate during the term of the policy. It is also designed to help you save money with the confidence that you have a Life cover if the unexpected should happen. That’s because a compulsory Life Insurance of N1, 000, 000.00 is included in the policy. Regular contributions for the Policy can be as little as N7, 500.00 a month with interest earnings at Leadway’s standard rate. All interest earnings are tax-free.
With these smart saving plans, you are surely covered for the unexpected in 2018. For inquiries on our savings policies, call the Leadway Assurance customer care service on (01) 2800 700, 2800 701 and +2348129997139 or send an email to Lcs@leadway.com for more details.