The first month of the year is usually the longest for many people as it is the most financially tasking. This is because a lot of companies pay December salaries by the middle of that month to enable their staff to meet up with financial expectations that come with the holiday season. By the time the New Year arrives, many find that they have overspent and are ill-prepared for January. Those who also have periodic financial responsibilities early in the year such as house rent and school fees are especially aware of this.

Financial planning is a skill and not so many people are adept at managing money. Think about it. For many people who find themselves skint in the New Year, it would probably not be their first time. One would assume that experiencing this situation once would be the motivation for ensuring better planning and prudence for subsequent years. But many of us just go ahead and repeat the cycle over and over again.

The average person has a cogent reason: the cost of living keeps rising and income usually does not rise proportionately. Fair enough but if one knows this, does not it imply that one should manage their money better? It can be hard with all the temptations that come with year-end festivities, so what is the way forward?

Everyone wants more money, and many people never seem to have enough of it despite their best efforts at acquiring it. We very often focus on finding means of earning more money to improve our lives. This means that people would focus on having a side hustle for example which brings in more money. What many people do not often consider is planning their income, adjusting their expenses, saving, and ultimately investing. It is not always about acquiring new funds, we also need to consider what we do with the funds we currently possess.

Planning your finances helps you understand how much you have available to fund your financial responsibilities and lifestyle, and how you can apportion your income to match your needs and wants. It helps you understand whether you have an income problem (you do not earn enough) or a money management challenge (you are not managing your money properly). You can better address your financial issues when you identify what aspects of your financial life you need to address.

Another December will arrive, and you may find yourself repeating this cycle. Maybe it’s not even a once-in-a-year situation for you because you are always looking for how to meet your financial obligations. Well, no time like the present to begin to do better. Here are some things you need to keep in mind:

1. Identify your financial commitments and the frequency of payments then match these with your income. Are there any gaps? What do you need to do to fulfil your commitments?

2. Review each of your commitments. Can you cut back on some of your expenses? How creative can you get with this?

3. Living below your means also helps you keep some more money away for a rainy day. You can afford some things, but you choose to either go without or reduce the tendency to acquire them.

4. If you acquired debt during the holiday season, ensure you stick to your repayment plan and if you have skipped a payment or need help in adjusting your repayment plan, do ask for consideration.

5. Put a bit of money away in savings for investment or even a rainy day. Do you know you can even have a December fund? Put a little away monthly and have a lot in December.

6. Saving money is good but with all the economic issues going on now, investing is better. You have to find which investment vehicle works best for your objective. Many of us want instant benefits but often, the products that provide these benefits could be fraudulent. You have to think long-term, and the best way is to find a professional who can give tailored advice based on your unique needs. Some available options include stocks, bonds, mutual funds, and even your pension plan.

7. If you get promoted this year or receive a bonus or salary increment, do not be in a hurry to upgrade your lifestyle. Remember to think long-term as you plan for that windfall.

Achieving financial freedom starts with taking the first step in managing finances better. The goal is not to get perfect at managing your money, rather it is to build consistency. Remember, your financial position will only get better when you become better at managing your finances.

By Gbubemi E. Atimomo

Contributing writer