One A Month – Twelve Achievable Financial Resolutions For 201626 Jan 2016
It’s January and no doubt you will start the year resolving to improve certain areas of your life. But did you know that only 8 per cent of us actually achieve our new year’s resolutions?
Personally, I always find things more achievable if they are broken down into easy steps, so I thought rather than the vague ‘I’ll get my finances sorted this year’, I’d put together a list of 12 realistic steps to achieving that goal.
1. Sort Out Your Will
A will needs reviewing on a regular basis. If you have one, read through and check if your wishes are still the same. Recent major life changes – marriage, divorce, a new baby - will almost certainly require you to alter your will. Also check that your named beneficiaries, executors and guardians of your children are all still relevant!
If you are one of the ill-advised majority who don’t even have a will, I can’t stress enough how important it is to have one. Make this the year to sort it out and consult a professional who can advise.
2. Streamline Your Finances
Review your bank accounts and if there are any superfluous to requirements, close them down. Analyse your monthly outgoings and see if there are ways to reduce them – changing to a new mobile phone provider or tariff for example.
3. Make Or Update A List Of Your Assets
It is a good idea to keep a comprehensive list of all your assets so you can track your progress. This will also be useful in sorting out your affairs if you should pass away.
4. Reassess Your Financial Goals
Having a clear idea of where you are heading financially is key to securing your financial future. Speak to a professional financial adviser to help you review or clarify your goals.
5. Check Your Life insurance
Life insurance is not only key to protect your family from the consequences of an untimely death, and help to avoid inheritance tax. Look at the cover you have and check whether it still meets your requirement, otherwise adapt.
6. Check Your Medical Cover
Healthcare is becoming increasingly expensive and state-funded care is shrinking. Comprehensive medical cover offers peace of mind in that you will have access to high quality care whatever health issues you face.
7. Check If Your Investments Are Performing
Are your existing investments performing as well as they should? Stagnating investments could be jeopardising your financial future, so have a look at your portfolio and jettison any underperformers. If you need help reviewing yours, a professional can help.
8. Tackle Your Debts
Prioritise those debts with the highest interest rates and commit to regular payments to get them paid off. Look at balance transfer options on credit cards and whether you can make savings by switching cards. And above all, resolve to live within your means.
9. Start Saving Regularly
Let 2016 be the year that you start the habit of a lifetime which enables you to benefit from compound interest and get your money working hard. Discuss a regular savings plan with your financial adviser to achieve better rates than you will get with bank deposits.
10. Check On Your Emergency Fund
An emergency fund is a key tool in your financial armoury. It is there to fall back on when financial curve balls are thrown your way. A good guide is to have enough to cover six months of regular outgoings.
11. Reconnect With Your Financial Adviser
I would recommend regular quarterly reviews with your financial adviser but at least once a year it is a good idea to have a more in-depth meeting to go through your financial situation in detail, reassess your goals and make sure you are on track to achieve them.
12. Take Time To Consider Your Achievements
A nice easy one to finish the year off with! Reviewing how your financial situation has changed over the course of the year by following these steps will motivate you to carry on in the same vein and ensure that year on year your finances are in optimum health.
I hope I have shown how by taking simple steps, you can make a real difference to your financial situation. If you would like advice on any of the above points, I’d be happy to hear from you in 2016. Selamat tahun baru to you all!