How I reached my annual financial goal in 6 months

Photo by Chronis Yan on Unsplash

I am writing this as I am working on my yearly budget. And, I don’t feel a jab of guilt penalizing me for not knocking this off on the cusp of the new year. Because let’s be honest, as alluring as the notion of ‘perfect’ timing may be, it can be quite debilitating; getting in the way of any real effort to start something.

So I now try to rely more on the slightest of urges, spurts of inspiration the universe sends out my way, to set out to do something.

Like I did last year in April, and laid out my first ever annual budget ‒ trust me it is less daunting of a task than it may seem to be.

It all started with a game. Intoxicated by the quarantine high of the long stretchy hours, my siblings and I thought it would be fun to calculate each other’s net worth (we can be quite geeky). Everyone would go around, list out their assets which we would then vet and assign value to.

It was all fun until my turn came, and I struggled to patch together a list that mostly included the few valuables I possessed ‒ which as a minimalist, is close to nothing. All in the hopes that it would serendipitously amount to an impressive figure and earn me bragging rights.

Luckily, I had just bought a small farm but that was simply the sole asset that kept me afloat.

So, the hard truth hit me: I had been working for a couple of years now, but I didn’t have much to show up for it.

I had previously tried out different saving plans but nothing stuck out for long. I knew then that if I was to achieve any of my financial goals I needed to change the approach; by going back to the basics.

Here are four ‘money tips’ that are so regularly touted, that worked really great for me:

Know where your money is going

Track your spending!

Consider this the dirty work you need to do to dig out all those indulging nasty habits that leave you broke at the end of each month ‒ anyone else guilty of the expensive spontaneous dinners out, under the guise of self-care? Keeping track of your spendings is a very crucial step in understanding your spending habits.

How can you reach your financial goals if you have no clue where you are spending your money?

Luckily in our digital era, there are so many accessible tools that are so easy to use. If you want to keep it simple like me, consider using the notes app on your phone; and make it a habit to log in your spendings as you go about your day (don’t wait till the next day, unless you have an eidetic memory).

Snapshot of my trackings — currency is in Tanzanian Shillings (1 TZS = 0.00043 USD)

A ‘click’ away, just like that you are able to keep track of your daily spendings.

‘Budget’ the (not so) sexy word

Now that you have an idea of how much you spend on the different categories, you can put together a budget that reflects your needs and goals.

I like to think of budgets as a way of telling your money where to go instead of wondering where it went. And it’s ok if you overspend on some categories when you start. Over time you’ll learn how to identify your weak spots and shift your spending habits.

For me, having an annual budget laid out and seeing how much money I’m able to save on an aggregate level, really motivated me to be ‘good’ even on those days when temptations kept knocking on my door.

Here’s what my annual budget template looks like ‒ feel free to download it. And, for budgeting, I use PearBudget’s spreadsheet. It is a free tool that has everything already laid out for you, and can also be easily customized. There are also plenty of other options out there catering to a wide array of preferences that you can explore.

Make time, at least once a week to review your budget even if it’s just for 10 mins; it makes a whole difference.

Pay yourself first

I literally live out this rule. On the first week of each month, I make a deposit into my savings account.

I opened a separate account because previously without a clear-cut separation, I always ended up spending the money. I even went a step further and left my credit card at my parent’s house — all the way across the country — to eliminate the slightest temptation to empty out my hard-earned savings.

While there are so many ways to digitally automate the transfers, I choose to physically go to the bank to make the deposit — and oh meehn! nothing beats the satisfaction I feel walking out of those doors!

Dare to dream big and set goals!

So you now have a pool of savings, what’s next?

The real game is investing that money, so it can make more money. It’s like sending your money out to go to work for you.

And so, I like to include alongside my annual budget a list of possible investments to explore. This step makes the whole process seem so real, and it’s hard to back-out of when my brain is already high on serotonin from the thought of what could be.

Building good money habits is doable, and there’s never a ‘right’ time to start. You can start as small as tracking your spendings. Slowly, you will be able to understand your money personality (yap, it’s an actual thing) and come up with a system that works for you and keeps you accountable.

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Finance enthusiast!

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Neema Kafwimi

Neema Kafwimi

Finance enthusiast!

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