MANILA, Philippines - As 2014 draws to a close, this is a good time to look back and see where you have done well and where you can do better in all aspects of your life – from your studies or your career, to relationships, to health and well-being, and even your finances.
Reflecting on how you did in the past year allows you to plan better for the year ahead, because it gives you an insight on your areas of strength and weakness.
One of the good things about assessing how you have done in the financial front is that you have actual records or figures to look at and tell you how you’ve fared. Ideally, you have set out some financial goals and laid out a plan to support them at the beginning of the year. If you did, then it will be easier to gauge your performance against your goals. If you did not have a plan to start with, this may be a good time to start making one.
To have a rough idea of how you managed in the financial front this year, examine your records – bank books, bank statements, credit card statements, tax records, and the like. Look at the following aspects of your finances: your savings, debt, and investment gains (or losses). Look how much you have in each of these categories, and as you go through each one, ask yourself the following questions:
Did you reach your targets?
If you had a pre-set target, then you would know right away if you did. If you had no set target in mind, ask yourself if you are comfortable with the amount you have for savings and investments, as well as your debt levels, with consideration to your current financial status. In thinking about your targets, look into the future and project. What do you want to achieve in the next five, 10, or 20 years? Let’s say you want to buy a house in the next five years using your savings. Look if your savings grew at the pace that will allow you to make the purchase in five years. Look at your investments as well. Are they growing at the pace that they should to meet your goals? Are there other investment products that may be better suited to your profile and support your financial goals?
Did you spend according to your budget?
This will be a good time to think about the purchases and acquisitions you made, and how you’ve kept close to your budget. You can easily tell if you went overboard if you’ve experienced getting your utilities cut off, or are paying a hefty sum for interest expenses. You would also know that if you’ve experienced many cash crunches throughout the year. If you overspent, then think of where you overspent. Did you spend more than you intended to on shopping or entertainment? Or did utilities rise higher than you expected? Ask hard questions. Could it be that your income is no longer enough for your needs, suggesting that you may need to rethink your career plans?
Where did you do well?
Look at everything and identify where you can say you did well. Why do you think did this happen? You might say that your savings improved drastically this year. If it did, what did you do or what were the events that led to this? Perhaps, you cut down on your unnecessary expenses or perhaps, you started putting aside a set amount each month. It could also be that you got a big bonus. Knowing where you did well and how you managed to do so will give you guidelines on how to achieve this again in the coming year.
Where can you improve?
Take a good hard look at where you could have done better, and think of why you have failed to achieve some of your goals. Did you lack discipline? Were you unable to plan in advance? Were you unaware of your financial options? In determining where you can do better, think about your behavior and spending patterns during the year. Did you overspend when you were with friends? Did you buy a car that was too expensive to maintain? By closely examining your expenditures vis-à-vis your daily activities, you may be able to pinpoint specific areas for improvement.
As you reflect on all these questions, you might want to start writing a journal that outlines your thoughts. This will guide you in planning how to address these issues in the months ahead. This early, why not make a commitment that 2015 will be a better planned year for you? Remember the adage – if you fail to plan, you plan to fail. We suggest taking the future with both hands and start securing your financial independence beginning today.
Grow Your Money is an editorial partnership between ABS-CBNnews.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.
Visit www.citibank.com.ph for more information.