In the Chinese zodiac, the Rabbit symbolises fortune, peace, and longevity. After the challenges of the past year, many people are looking forward to a fresh start for their finances in the Year of the Rabbit.

Here are 5 things you can do to set yourself up for prosperity in the lunar new year and beyond.

1. Review your budget

As you clean and declutter your home, do not forget to tidy up your finances for the year ahead. A budget can help you organise your finances more effectively, so take some time to review it.

Start by calculating your monthly net income, which is your salary minus any CPF deductions. Tally up your fixed expenses each month such as mortgage payments and utility bills, and track your variable expenses like shopping, entertainment, and dining out.

Subtract your expenses from your monthly net income. The money you have left over can then be set aside for your financial goals.

2. Determine your goals

The new year is a time to reflect and figure out what your goals for the future are. It can help to think about them in terms of short- and long-term objectives.

Short-term goals are those you want to achieve within one to three years, such as a home renovation or a new car. Long-term goals are typically more than seven years away. These could be buying a second property, your child’s university education, or a comfortable retirement.

Once you have written down all your goals, decide whether they are essential, important, or merely nice to have. Identifying your priorities can help you focus your resources on the goals that matter the most. From there, you can figure out how much to save and invest for each goal.

3. Set up your investments

Now that you have identified your top financial priorities, you can start developing a plan to help you achieve them.

One way is to create different portfolios for your different goals. Generally, a long-term goal like retirement requires a different investment approach from a short-term goal like a home renovation.

Let’s say you plan to renovate your house next year. You will probably want to take on less risk to avoid the possibility of your portfolio declining just before you start renovating. Lower-risk investments to consider could be money market funds or short duration investment-grade bond funds.

But if you are investing for a comfortable retirement in 30 years’ time, you can take on more risk since your portfolio has more time to recover from market volatility. In this case, you can consider tilting your portfolio more towards stocks. Although stocks have relatively higher risk than bonds, they also have the potential to generate higher returns over time.

4. Make adjustments to your plan

As you move through life, plans can change. It may be necessary to tweak your spending, savings, or investments along the way to accommodate your financial goals.

For example, your child might want to study abroad. To hit that milestone, you may need to allocate more funds toward that goal.

There are several levers you can pull to make that happen. For instance, you could adjust your spending by trimming expenses on “wants” – things that are nice to have but not absolutely necessary. You could look for areas to save more each month, such as switching to an electricity provider that offers a more competitive pricing plan.

You could also look at downsizing some of your less critical goals to free up the necessary funds. The trade-off can be significant with this option, so it helps to carefully prioritise your goals.

5. Schedule periodic reviews

You have set your goals, created investment portfolios for each of them, and made adjustments to your plan as necessary.

Now, it is all about making sure you continue to stay on track with your financial goals in 2023 and beyond. Make it a habit to check in on your savings and investments at least twice a year to assess if they are still suitable for what you are trying to achieve.