Hopeton Morrison, ContributorMANY PERSONS find themselves with a windfall at Christmas from bonuses, incentive payments and/or remittances. But without a plan it could all be swept up in the storm of advertisements and spending taking place at this time.
In fact January is the month when doctors treat most persons for depression, partially brought about by massive debts incurred at Christmas. Take some time instead and implement the following seven strategies to deal with your windfall:
Do you have an outstanding credit card balance? Pay it off. Credit cards are nothing more than high interest loans.
Put some money towards your retirement plan.
Unfortunately many of us don't get on to a retirement plan until very late in our working lives. Sometimes this is due to plain ignorance, other times it is a question of prioritising our spending for things that are more immediate such as children's education, home, car, insurance, health concerns and so on.
Invest in a unit trust/mutual fund. It is said that the investment habit is hard to start, but once started fairly easy to maintain. If you start your investments in a mutual fund or a unit trust when funds are readily available, it will be far easier to continue this habit when funds are difficult to come by.
Pay down a loan or mortgage. Because you are putting additional amounts towards your monthly loan payments here you will reduce your overall interest expenses.
Identify your financial goals for 2006 and beyond. Remember that it is just as important to stay focused during the season of Christmas on your financial goals which are still going to be very much around come January next year.
Be as specific as you can when you are setting them. Break down your long term goals into intermediate target dates, in the process creating a series of short term goals. Identify all unplanned spending impediments that could threaten you in the new year.
Identify the benefits to yourself. High-achieving persons and motivational speakers advise us to visualise our dreams and hopes. Identify all of the benefits that you expect once you have achieved your financial goals.
Establish an automatic salary deduction plan. In this way funds are deducted before they get into your hands.
Hopeton Morrison is general manager of St. Thomas Co-operative Credit Union Ltd. and lecturer in the School of Business Administration at the University of Technology. Please send comments and questions to: hmorrison@stccu.com
