It is never too late or too early to start saving and investing for your financial future. As you enter the new year, take the time to re-evaluate your finances and make sure that you are on track with your 2017 financial goals.
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The end of the year has arrived, New Years’ Eve is here and it is time to make those New Year resolutions. One of those resolutions should be to improve your financial planning. As with any New Years’ resolutions making, the resolution is the easy part and sticking to it is the difficult part.
If you're spending too much and saving too little, or if you don't even know where your money is going, this is a good time to give yourself a financial check-up. Even if you're doing well financially, you should take a look at your savings, spending and processes to see what can be improved.
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Now is a good time to start evaluating. Do an audit of where you are. Below are a few tips to get you started:
If you haven’t made a budget, this is a good place to start. Have a look at your spending patterns over the last 12 months, you will be amazed at the wastage. Start by cutting out those trips to the convenience store or to the local fast food store. These are expensive luxuries that you can do without. Once you have put together a budget ensure that your expenses add up to less than your net earnings.
2. Update your insurances
Too many people ignore this vital part of their lives, but this is of importance as it ensures you and your family are financially looked after should a tragedy occur. Just as important, however, is to ensure that you are not over insured. Get the necessary cover in place and take care of the unforeseen. Your first step will be to get in contact with a professional who will be able to advise you on what would work best for your current and future needs.
3. Know your financial goals and objectives
Write down your goals and objectives and give time periods for these:
- Short-term goals – these are goals that you want to achieve in the next year to three years, such as saving for a deposit on a car or overseas travel;
- Medium-term goals – these are goals you want to achieve in the next three to 10 years, such as purchasing a house, paying for a wedding or education; and
- Long-term goals – these are goals that are longer than 10 years. An important long-term goal is planning for your retirement. Do you know what age you want to retire and do you know what your expenses in retirement are going to be? Do you know what you want to do in retirement and will you have sufficient liquidity in retirement to achieve these goals?
Related: Your basic guide to budgeting
4. Update your Will
This is one of the most important documents you will ever have. You need to ensure that you review this annually and that it is always up to date. You must also certify that it is kept in a safe place, preferably your safe and those that are close to you know where to find it.
In order for you to keep your New Years’ resolution it is important that you review you planning monthly. This way you will hold yourself accountable and allow you to audit yourself continually.