#Moneyconversations To Have With Yourself Before 2023

One of the good things about the Christmas break is the time it affords, amid the festivities, for reflection on the year that's about to end and the one that's hovering on the horizon. Ask yourself this question: What is my money outlook for next year?

For women, especially, this kind of evaluation is essential, as many were raised with the outmoded belief that girls should not be overly concerned with money, because a husband will take care of the family's finances. But what if no husband turns up? Should a woman just spend her money in an ad hoc way, and yes, maybe saving a little, but not actually educating herself about how to make money truly work for her?

Today, more women are recalibrating conventional thought on gender roles as these apply to money, not just for themselves but also for the daughters (and sons) they are raising. Are you one of these women who understand this theoretically but, even as 2022 draws to an end, can't seem to find the gears to execute the money moves you've read about here and elsewhere? Do you feel overwhelmed by the different things you know you ought to be doing? Consequently, your financial outlook at the end of this year isn't that much better than it was last year this time? Or, did you finally begin your investment journey, but simply abandoned it? Investment is an ongoing exercise that requires maintenance so you can get the best returns on your money. Regardless of these high inflationary times, you must nurture and build on your investments.

Use this last week of 2022 to reformat your financial goals with these three simple tips to get you going.

1. Know where you stand now

Perhaps you started 2022 off strong with saving, even paying down debt, with plans to start investing, and then backslid halfway through the year for whatever reason. After that you just lost momentum and went into freefall when your finances became too messy to deal with. Did a big change occur in your life to put a strain on your finances, like divorce, unplanned pregnancy, the death of a parent? Or was the year all about the pretty dresses you bought to self-medicate?

Put pen to paper and work out your true financial standing, in terms of your savings accounts, credit cards, and so on. Where did your money go? How much debt are you in? Making an honest assessment will give you a clear picture of the different direction you may need to head in next year.

2. Reset your financial goals and budget

Remember, a financial goal is a milestone you set for yourself and the time frame you intend to reach it. These goals will comprise four pillars: earning, saving, investing and spending in proportions that match your short-term, medium-term or long-term plans and will be dictated by your monthly budget which you must closely follow. A financial goal, for example, could be starting an emergency fund. Or setting up a retirement fund, even if retirement isn't imminent. It could be saving towards home ownership or even further education. It all depends on what you see for yourself in the future, then working out a budget that will assist you in achieving these goals because they will keep you focused on how to streamline your income. You'd be surprised to discover how many people don't make budgets or think they apply only to the underclass. And then they wonder why their finances are in chaos. Refine your budget, and stick to it.

3. Rebalance your investment portfolio

Let's say you actually did make the plunge and started investing which, let's face it, is no longer optional in today's environment if you're at all interested in wealth building. But maybe your portfolio was set up strategically just for moderate growth. If you're a woman, studies have constantly shown that your risk tolerance is often usually lower than a man's. So maybe you started the year with a 60/40 portfolio balance of stocks and bonds and that's where you parked it.

But the truth is, because of volatility in the market, your portfolio could have ended up with a 50/50 mix. You need to take a hard look at your portfolio and maybe return to a 60/40 mix. Remember, different investments can and will grow at different rates every year, especially with fluctuations in the market. One investment might now be too big or too small. Also, you might want to take a bolder stand. The bigger the risk, the bigger the reward, usually, over time. If you still feel confused about your investment options, make 2023 the year when you reach out to a financial planner who can advise you on what the best moves will be for you.

The days of women hoping that her finances will magically work themselves out are long gone. Cheers to more responsible financial behaviour for the new year!

Lamar Harris, vice-president, wealth management, NCB Capital Markets

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