THERE are several trends that will impact your personal finance this year, according to global experts.

       These include inflation; the ongoing Covid-19 pandemic; change in interest rates; increase in expenditure led by social gatherings, vacation and holiday spending; as well as environment, social and governance (ESG)-focused investing.

       Alongside these factors, the rapid adoption of technology will see more applications with digital offerings such as wealthtech apps that have been introduced to reduce physical interaction.

       Even the recent devastating floods is a wake-up call for some to review their insurance coverage.

       IPPFA Sdn Bhd licensed financial planner Kimberly Law sees a burst in travelling and vacations, and a rise in expenditure in leisure and social gatherings as trends this year.

       There is also extra relief for lifestyle in Budget 2022 which will prompt people to upgrade or buy new gadgets, especially if they continue working from home.

       She also expects an increase in trendy and hyped-up investments such as the non-fungible token (NFT).

       The NFT can digitally represent any asset including online-only assets like digital artwork and real assets such as real estate.

       Other examples of the assets that NFTs represent include in-game items like avatars, digital and non-digital collectibles, domain names, and event tickets.

       These are some of the interesting trends in the personal finance space this year.

       A lot has changed in the past two years and there is no doubt that the pandemic has forced us to evaluate our finances.

       As we embrace the new year and enter the next phase of economic recovery, it may be timely to revisit your personal financial goals and gauge your financial health again.

       Money is also important but think of maximising your money if you want to achieve greater financial happiness. To do that, you may want to make some changes to your financial habits.

       “Have a good relationship with your money. It shouldn’t stress you out. (In fact), a good relationship with money improves mental health,’’ Law said.

       Different people have different financial goals, risk appetite, level of management and financial situation. It is best to find out what suits you best and how you can work towards having a balanced investment portfolio while taking calculated risks.

       For that, self-awareness comes first, then self-control, said Law.

       “You need to be aware of your spending habits. Then you will know what to control,’’ she said.

       If you try to take control immediately without being aware of your spending habits, it could pose a problem, which could make you unhappy; and instead of creating new habits, you could revert back to your old ways, thereby making the situation even worse.

       In the same way, Law believes cashflow comes first, then investments.

       “Maintaining a healthy cashflow allows you to invest your money into different asset classes. Without a healthy cashflow, you can’t even think of investments,’’ she said.

       However, she said the most common misconception is that some people want to wait until they have wealth in order to manage their finances.

       “This is a problem because you need to manage your finances to get wealth. Cashflow plays the main role in your finances. Without cashflow, you can’t build assets to invest in. Don’t skip cashflow management and jump into investments,’’ she added.

       Not all insurance covers damages from floods unless you add on additional coverage for floods. But it comes with additional costs too.

       “If you park or stay or live in areas that are prone to flood, it is best to have this additional coverage at a small cost. If you stay on the 10th floor in a high rise or up on the hill, then it may not be necessary,’’ she added.

       Make new resolutions by all means in this new year to grow your personal wealth. But make sure you are willing to make changes to your investing habits to reach your financial goals.

       That would also mean making the right decisions and having the right investment portfolio that suits you, saving more and keep a lid on costs.

       Happy investing and try to strive for more financial happiness amid the pandemic in 2022.