When the year begins, many of us make resolutions. From going to the gym five days a week to eating healthily, cutting down on sugar and savings.

Gym enthusiasts will tell you that the fitness studio is usually packed for the first six weeks of the year. After Valentine’s Day, many have fallen off the wagon and never look back.

With chocolate, you’ll realise as you’re chewing on the last four pieces that you are supposed to be off sugar. It happens.

The same with savings – you’ve been throwing R50 notes in a tin and then boom, you open it and never look back. Well, until January.

There is no quick fix for any of these crimes against our bodies, health, bank accounts or savings boxes.

But, there are steps that can be taken to ensure that we remain optimistic and I always encourage people to remind themselves of why they started. Your savings target will always keep you encouraged to start over if you dipped your hands in the piggy bank before time.

In my savings journey, setting clear and realistic targets has always worked for me. Case in point is finishing the 10c challenge and cashing out R6,679.50 at the beginning of February. The savings were intended for the purchase of a washing machine and that’s what I got – just in time for my birthday.

I started the challenge again on February 1 and at the beginning of March, I’m planning to increase the amount I save (daily) when the country is hit by a blackout.

I usually save R10 and have it multiplied by whatever the stage of power outages we’re on. If for instance, we are on stage 6 blackouts, it means a day, I will be saving R60. I’ve had to cut down on takeaways to ensure that I have more money towards my savings goals.

Nomi Bodlani, head of direct clients at Allan Gray, says the trick to making resolutions stick is to set smart financial goals.

“Ones that are [Smart] – specific, measurable, achievable, relevant and time-bound. The smart approach is particularly useful when applied to finances because you can set and measure financial goals in a very objective way. 

“The first principle centres on setting specific goals by refining broad aspirations into well-defined targets. State what will be accomplished and the actions to be taken to achieve each goal,” says Bodlani.

She says for example, instead of starting an investment as a goal, set precise objectives, such as start an investment to save R50,000 within 12 months as the first step towards accumulating a down payment on a property in five years.

This level of precision enhances focus and helps make the goal more attainable, she says. 

“The second principle emphasises the need for measurability. By setting quantifiable milestones, investors can track their progress and remain motivated. For example, with a specific goal such as R50,000 you can break it down into monthly amounts or decide upfront how you will use any expected bonuses or cash lump sums when they arrive.

“No matter which way you choose to save, a measurable goal enables you to monitor your own financial growth and celebrate progress along the way.”

Bodlani says achievability, which is the third principle, means that goals need to be realistic to maintain the enthusiasm to achieve them.

“Sound investor behaviour is a key ingredient for investment success. While we all have the best intentions, sticking to them can be a challenge. A good, independent financial adviser can help you by putting a plan in place that meets your personal goals and objectives – and help you remain committed, even when the going gets tough,” Bodlani says.

She says working towards achieving smart goals “doesn’t happen in a vacuum”.

“Creating a financial plan and assessing your income and expenses, will help you to establish realistic goals. Following on from the previous steps, you can now evaluate very clearly whether your specific goal is achievable – ask yourself, are you realistically able to save the required amount every month? What planning needs to be in place so that you have the discipline to invest expected cash lump sums rather than spending them? 

“The relevance of goals, the fourth principle, refers to aligning your aspirations with your long-term plans and personal values. By doing this, you are more likely to be committed and inspired throughout your financial journey.”

Bodlani gives tips for quarterly goal setting to foster good financial habits:

January-March: Kick off the year with budgeting, goal setting and reviewing your financial plan (or establishing one). A good financial plan should cover your goals over various time horizons (short, medium and long term) and ensure that your portfolio’s asset allocation is positioned to meet each of these goals. In addition to your goals and their time horizon, your risk appetite will also inform the unit trusts in which you invest.

While your risk appetite may have changed if you have moved into a different life stage, remember, you need to maintain adequate equity exposure to generate inflation-beating returns over the long term. This sort of planning will set you up well for financial decision-making in the months ahead. February will be the first chance to flex this muscle, as it is the end of the tax year and the final opportunity this year to take advantage of the annual tax incentives offered by the government to encourage us to invest in retirement products and tax-free investments.

April-June: Although tax-filing season only opens in July, the second quarter is a good time to start getting your admin in order. File your tax certificates as they come in, so that they are easily accessible when you need them to complete your tax return.

July-September: July is Savings Month, a prompt to review whether you are still on track and to celebrate the progress you have made against your financial plan for the year, making adjustments where necessary. September is Wills Week; focus on estate planning and ensuring you have a valid will in place.

October-December: This is not called the silly season for nothing. It is the season to be jolly – not the season to erode any progress you have made during the year. Your spending decisions over this period can have a significant impact on your financial goals; and with spending cues around every corner, like Black Friday and festive season specials, set yourself up for success by planning early and avoiding overspending. If you are lucky enough to get a windfall in the form of a bonus or 13th cheque, consider using some of it to settle any expensive debt, start an emergency fund or to top up a long-term investment account. 

mashabas@sowetan.co.za