Time for a financial check-up

Many of us may have made little progress on our 2017 new year’s resolutions. But if you check on your financial health this month, you can still start 2018 on a stronger footing.

An annual financial “check-up” is important, as so many things can change in a year. Assess whether your financial plan, policies and money habits are still in line with your life goals.

Follow this checklist to ensure your financial plans meet your needs and goals.

Review spending habits

Review your money habits and get back on track: Review bank statements: see where you’re spending extra rands. Don’t only look at individual costs, look at cost over time. That R50 you spend on two coffees a day, is R1 500 per month. Make a list of the top five things you can save on. E.g. if you eat out 3-4 times a week, consider cutting it down to once a week.

Stick to your plan

These steps could help you stay committed to your budget: Create a monthly auto-reminder on your phone or set aside a recurring time in your calendar to review your budget. Choose a regular date, preferably before pay day, but after you’ve seen your income for that month. For example, if your payslip is available on the 20th and you’re paid on the 25th, set aside an hour or two on the 23rd. List your income and expenses, then deduct the latter from the former. This can give you powerful insights. Life’s a journey, goals are your pitstops

Consider your goals and the time for achieving them. Short-term goals could include paying off your credit card debt or creating an emergency fund. Medium-term goals may be to save up for a deposit for a new car or helping parents go on a trip; longer-term goals could be to save for retirement. When life changes, update your policies

If you’ve experienced any major life changes e.g. marriage, divorce, new family addition or responsibility for a frail family member, ensure your policies are updated accordingly.

Soré Cloete is senior legal manager at Old Mutual Personal Finance