END OF YEAR FINANCIAL PLANNING

Welcome to another week of financial learning where i address end of year financial planning. We are gradually entering into the eleventh month of the year 2020! Hurray!!

December is an interesting month for various reasons. The first reason is the fact that most workers in Ghana enjoy extended holidays sometimes from 24 December to 3 Jan.

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 Bonanzas.

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

Many groups and families specifically organize programs for the Christmas holidays as most companies give their staff extended holidays with the exception of we the bankers who have to “arrange” our faces nicely in our offices thinking of what our friends might be doing at home.

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

Many shops and FMCGs organize what they call Xmas Bonanzas to attract human traffic and sales. During these Bonanzas, prices of many items are reduced from 10% to as high as 70%.

The rationale for this exercise as I said earlier on 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 happened will be happening at the various shopping malls soon.

In the coming days, the world will celebrate what is termed as “Black Friday. It is a remarkable day across the major shopping centers in the world.

Black Friday is an occasion where almost all major shops reduce their product prices by 20% to 50%.

During my participation last year, I observed a few things, which I would like to share them;

People “over buying” things they would not 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 pick items and later find no use for them at home.

People "wasting" money to purchase items, which at the original price would never have bought

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

I will, however, 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 mindset of Bonanzas and reduced to clear. January 2019 is just around the corner. Parents with kids in school will appreciate this very well than the singles.

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

Funny enough, in most cases, we waste all these monies on so-called fun-filled programs and unplanned purchases and 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 end up having medical conditions when realities hit us in January. Financial challenges cause depression, anxiety, weight loss, strained relationships, and insomnia. If you are not able to manage the aforementioned consequences, it can lead you into 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 you consider the financial toll on you in January 2019.

Do not be a burden on your friends in January 2019 because you thought December was never going to end! Start preparing for 2020 with your financial plan.

I wish everyone a wonderful and memorable week!