Financial check list for new year

TIPS: HOW TO ENSURE YOU MEET NEEDS AND GOALS

Personal financial management starts with making a budget and sticking to it.

Many of us started 2017 with good intentions to manage our money well, vowing perhaps to spend less on takeaways, open a tax-free savings account or commute by public transport instead of by car. However, it’s all too easy to get sidetracked by other issues. As you enter the new year, take some time to review your money habits. Consider doing the following:

A review of bank statements to see where you’re spending extra rands.

Don’t look at individual costs only. Look at total cost over time. That second coffee of the day might be only R25, but in total you’re spending R50 on coffee per day, which is R1 500 per month.

Make a list of the top five things you can save on.

Download the 22seven app, which categorises your spending automatically to give you an idea of where your money goes daily, weekly and monthly.

Got a plan? Stick to it

Personal financial management starts with drawing up a budget.

Sticking to this budget is, however, what’s important. Using a budget will give you insight into how your income and expenses fluctuate over time. Stay committed using these steps:

Create a monthly auto-reminder for a budget review.

Choose a regular date, preferably before pay day, but after you’ve had a view of your income for that month.

Use a free online budget template or set up your own. The most important part of any budget is listing your income and your expenses and then deducting the latter from the former. This simple sum can give you powerful insights.

Life’s a journey, goals are pitstops

Before the year gets into full swing, consider your goals and the time horizon for achieving them.

Short-term goals could include paying off your credit card debt, creating an emergency fund or sticking to your budget.

Medium-term goals may be to save up for a deposit for a new car or home or helping your parents achieve an overseas trip, while your longer-term goals could be saving enough for your retirement.

When life changes, update your policies

If you’ve experienced any major life changes, like marriage or divorce, a new addition to the family or responsibility for a frail family member, make sure your policies are updated accordingly. When to update your policies:

If the value of assets has increased or decreased significantly, update policies including short-term cover;

In the event of changes in medical status.

Take time to reflect and set up a review meeting with your financial advisor.

If you don’t have one, contact an accredited financial advisor who can help you make 2018 a great money year.

Soré Cloete is senior legal manager at Old Mutual Personal Finance.