Taking charge of your financial decisions can be a challenge because personal finance management often comes with hurdles. There is a lot of stress that revolves around money and this makes people avoid talking or thinking about it.

For you to improve your financial health as the year unfolds, you need to be intentional about planning and executing your finances. Financial planning involves developing a personal roadmap for your financial well-being.

Below is a guide to financial planning in the New Year.


Budgeting in the New Year is fundamentally important as it sets the tone of your financial status as the year progresses. Note your income and allocate appropriate money for your expenditure for any given period of time.

According to personal finance coach Susan Wanjiku, “budgeting is telling your money where to go instead of wondering where it went.” How you execute it and the consistency you give it is also part of the process that ensures success.

Set meaningful financial goals

These are financial targets that you set to achieve at a stipulated time. They could vary from short-term, mid-term to long-term goals. For example; building an emergency fund, paying off a car loan or buying a home.


It is important for you to establish how much you plan on saving and investing each month, where this money will be saved and invested and the exact purpose attached to this money. Doing this will reduce your financial stress as well, providing you with a greater sense of financial freedom. You need to establish and plan for all annual payments you need to make in the year, how much they will cost you and create a sinking fund for each with clear figures set out.

Manage your debts

Debt management is a process that gets your debts under control through financial planning and budgeting. Know which debt you are going to prioritize and how much of it you plan on paying off each month.

There are two types of debts; good and bad debts. In a business context, debt is capital taken to provide whatever you need at a given time, but debt is debt. It is plainly money borrowed that you must pay back. The end result of the situation is what dictates if it is a good debt or a bad debt and the difference between the two.           

With bad debt, you must always ask yourself what the ROI (Return on Investment) of that particular expense is before you take it up. If the figure is less than what the debt will cost you in matters interest and value of money in time, contemplate waiting until you can make the outlay from cash flow instead.

Check on your spending habits

Strive to improve on your spending habits. You could do this by specifying what your monthly limits for food, utilities, self-care and giving will be. Invest in an app that tracks your spending and always do a personal audit before you go shopping.

Get more money

The goal here is to always make more than you consume; it’s about increasing your income streams. Find passive income to boost and improve your current income. This could be from offering a service, your skill set or starting another side business. The more you have, the better, as you need to know if you are making enough money for all the above money functions.

Plan for fun

Most financial goals revolve around being responsible, but always have a “fun” goal. If you work hard and save religiously, you deserve to reward yourself. This could be for a vacation, refurbishing your man cave or any other thing that you want.