“What you get by achieving your goals is not as important as what you become by achieving your goals” Henry David Thoreau
2015 was a great year for me – I learned some important lessons about planning and achieving goals. I learnt that the process is also very important – so every goal needs to be backed by a plan of exactly what you will be doing to achieve that goal. Below are the financial goals that I had set for myself for the year 2015 and how I did against them:
Have saved a total of 600,000 in SACCO by end of the year.Accomplished!! I will have to decide what to do with this since the main point of a SACCO account is to be able to borrow and I don’t forsee that I will need to borrow from SACCO ever. Have invested a total of 1,000,000 in listed securities by the end of the year.Accomplished!! I have actually invested a little more than this and in total its maybe around 1,200,000 Cancel the credit card and not to get into any credit card debt during the year.Accomplished!! Though I did not actually go ahead and cancel the card, I completely stopped using credit – though to be totally honest I had no choice as my credit card is expired.
- Save enough hard currency to put into a fixed deposit account by the end of the year. Fail!! I think this was too ambitious but I plan to start saving an emergency fund in hard currency which I can put in the fixed deposit if its a high enough amount because some banks may insist on a high minimum.
Really look into reducing shopping and generally excessive consumption spending, looking back on the year – I would say that its when I am travelling that things go wrong so for 2015, this is an area that I will watch carefully – I will be travelling as light as possible and also I will not shop unless its something absolutely necessary. Accomplished!! Though this is very subjective – I did stop my careless spending habits and instead a gave allot more consideration to my purchases and buying only what was necessary.
So I managed to achieve 4 out of 5 goals which is not bad at all. For 2016, the main goal of course is to be happy and part of that is managing my finances well, so my financial goals for the year are:
- Save a five month emergency fund. An emergency fund is something to protect you from any short-term setbacks that could affect your long term financial goals. The main purpose of the emergency fund is to provide you with enough money to live for up-to a year ideally if you were to lose your job. Although I do not want to save a full year of expenses because that will take too long. I will start with a five month emergency fund for now and maybe top it up later. An emergency fund is also to cover for any other unexpected expenses that may crop up such as medical bills and so on. I will also be saving it in hard currency and $10,000 is my targeted amount.
- Blog more regularly and consistently and my target is to do a minimum of 50 posts during the year, so that is about 1-2 posts a week
- Make an effort to sell all the unnecessary items that I own – the goal is to get rid of items that I don’t need, to try to raise a little extra money and most important is to get some experience selling. I will photograph the items and make a very good effort to sell them online- though I cannot know how well I will do. My target is to try to raise $1,000
- Buy into a pension fund for my future retirement. I had started saving into a pension fund when I was living and working in the UK, but I did not contact the company to let them know that I have moved. So I need to get back in touch with the company see if my pension is still there – and decide if I should continue contributing to this pension. I also want to start contributing a very minimum amount to a pension here in Kenya. I already talked to a broker and they have these flexible pensions for people in the informal sector and the minimum contribution is about 5,000 shillings a month. I did all the paperwork already but I need to pay my initial contribution.
- Top up my SACCO to 1 million shillings. A savings and Credit Co-operative allows its members to save their money together and make loans to each other at a very reasonable interest rate of 12% or 1% a year. At my SACCO you can borrow upto 2.5x the amount of money that you have saved. I do not think that I will be using the borrowing facility so I am thinking that once I reach 1 million, I can close the account and put it into a fixed deposit account and with I million at least the interest will be significant and easy to calculate. Fixed deposit rates can be very high in Kenya – about 15%
- Not to use any credit and if I do to pay it back immediately. I have been paying the minimum on my credit card and I have not closed it yet because I guess I want to use it as my emergency fund which is very wrong I know – thats why its so important to save the emergency fund this year.
- Keep better track of my expenses by entering the expenses every few days and also keep track of my net worth on a monthly basis. This year I kept a monthly track of my expenses but sometimes I was off by quite a significant amount and this year I want to keep track of every single shilling to be sure that nothing is being lost at all. The way to do this is to write down my expenses every day ideally. I will also track my net-worth as this is the ultimate measure of how well I am doing financially.
- Reduce my credit card debt by £1,000 and the best time to do this is when the pound is weak. I am not yet ready to eliminate my credit card debt and I understand that this does not make any sense at all but I want to save the emergency fund first. The right thing would be to concentrate of eliminating debt first but let me start with baby steps and put £1,000 on my debt.
- Earn $1,000 in passive income. $1,000 is roughly equivalent to 100,000 shillings. In 2015, I roughly earned a little under $400 so to get to $1,000 I will need to invest some more. I love my investment in shares because I get to earn something without any effort and also if say I were to need some cash all I have to do is send and email to the broker to sell. Land on the other hand is a process to sell – you may have to come up with a marketing plan, drive to the land, take photos, start advertising negotiating with buyers and so on. Selling land is allot of work.
- Make a sale for my business by July 30th. I started a business during the year- at least I have registered it, registered the trademark, bought a logo but I still need to open a bank account and get a website. I am at the very very early stages and its going very slowly but I want to dedicate my Fridays to working on it so that the business can be ready to start selling something during the middle of 2016