Post COVID-19 End of Year Financial Planning


Welcome to another week of financial learning.

Today’s discussion will be a recap of my End of Year financial planning published last year.

We are now in the twelfth month of the year 2020! Hurray!!

The year 2020 has been a very challenging time for everyone due to the health pandemic the world has been battling. It brings a breath of joy that vaccines seem to be on their way now.

Savings have been depleted as a result of the lockdown. Investments have been liquidated and used due to the effect of COVID-19. Meanwhile, some people have had their assets grown as a result of the pandemic.

Over the past few months, businesses have found innovative ways to adapt and reinvent.

We all have stories to tell about how the year went; however, gains or losses made can be worsened if we fail to plan for the year’s last festivity month.

December is an exciting month for various reasons. The first reason is that most workers are paid somehow earlier than the standard time we receive salaries.

Some workers are paid as early as December 15.

December is crucial because most workers enjoy some extended holidays, sometimes from December 24 to January 3.

It therefore offers opportunities for rest. December also comes with a reduction in price for some goods and services. The annual term for this is Bonanza and Discount Promotions.

The last but not least reason why we all love December is all the social programmes it comes with. These programmes start from December 21 through January 2.

Many groups and families specifically organise programmes for the Christmas holidays. Most companies give their staff extended holidays – except sometimes bankers, who have to ‘arrange’ their faces nicely at the office while thinking of what their friends might be doing at home.

In all, December is a fun-filled and resting month with three main holiday periods – starting with Farmers’ Day, Christmas, Boxing Day, and New Year Eve.

Many shops and FMCGs organise what they call Xmas Bonanzas to attract human traffic and sales. During these Bonanzas, many items’ prices are reduced by 10% to as much as 70%.

As I said earlier, the rationale for this exercise is to pull human traffic to the shops and cut down on old stock for new ones in the ensuing year. A typical example of such Bonanzas will be happening at the various shopping malls soon.

In the coming days, the world will celebrate what is termed ‘Black Friday’. It is a fabulous day across the major shopping centres of the world. Many companies have extended Black Friday from the first week in November to the first week of January.

Black Friday is when almost all significant shops reduce their product prices by 20% to 50%.

During my participation two years ago, I observed a few things which I would like to share.

People ‘overbuying’ things they don’t ordinarily need

Many people rush to major supermarkets and malls to overbuy items that do not fall under their needs. In some cases, the price reduction alone entices some people to purchase items and later find no use for them at home.

People ‘wasting’ money purchasing items they would never have bought at the original price

“The Greedy Retailers were sweeping all the reduced fast-moving items for Super Normal Profits.”

However, I will keep reminding you of a coming ‘Hard’ January around the corner, which is ready to bite you hard.

Do not discipline yourself to save from January to November and splash all in December with the mind-set of Bonanzas and reduced to clear. January 2019 is just around the corner. Parents with kids in school will appreciate this very well, much more than the singles.

Most companies pay salaries very early in December, with some even adding bonuses.

Funnily enough, in most cases we waste all those monies on so-called fun-filled programmes and unplanned purchases – and then come back to reality in the middle of January. Some even resort to selling their belongings to make ends meet.

If care is not taken, we will have medical conditions when realities hit us in January. Financial challenges cause depression, anxiety, weight-loss, strained relationships, and insomnia. If you cannot manage the consequences mentioned above, it can lead you to substance abuse and, finally, heart diseases.

Be wise this December! Buy only what you need, not what you want! Practice the 50/30/20 rule this December. 50% for the needs, 30% for your wants, and 20% in an investment product.

Have fun but be measured!

Travel to release stress with the family – but only do that after considering the financial toll on you in January 2021.

Do not be a burden on your friends in January 2021 because you thought December would never end! Start preparing for 2021 with your financial plan.

Build a budget for this month by considering how much income you need to survive in January with the returning fees.

School fees will be paid in January. Payment of water bills and 100% Electricity bills are expected to be restored in January.

I wish everyone a wonderful and memorable week!

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