Haul out the checklist – it’s time for a money review

Priya Naicker, Advice Manager at Old Mutual Personal Finance

Good intentions can be like rainbows. Clear and bright one minute, faded and forgotten the next. In fact, some surveys suggest that only 20% of people stick to their New Year’s resolutions past February each year.

“While it’s possible to quick-fix fitness or social commitments, allowing your money goals to slip can have a significant negative impact on your current and future financial wellbeing,” says Priya Naicker, Advice Manager at Old Mutual Personal Finance.

“To be fair, you may not have anticipated the impact of a 1% increase in VAT, or an 82 cents increase in the petrol price. Rising prices can make it harder to stay on track.”

She adds that having a financial plan that you regularly review can serve as the motivator you need to adjust your spending behaviour and priorities along the way.

“If you have not made the progress you expected to, don’t be discouraged. Instead, use the opportunity to get back to basics. Revisit your goals or create new ones and allow yourself to be inspired into action towards achieving them. Set yourself up for success by not only planning for short term goals, but also medium and long term aspirations.

“With the return of spring, September is traditionally seen as a time of freshness and new beginnings in South Africa.  Consider expanding this to include your money matters. Take a moment to assess the continued relevance of your goals and to what extent you are progressing towards the desired outcomes.”

Naicker suggests the following steps to spring clean your finances:

1. Things change – check in with your goals

Refer back to the financial goals you jotted down at the start of the year, and decide if these are still relevant and practical.

“Life is a journey and as we move through it, our needs and ability to fund these change.  If you’ve changed jobs or married, for example, it’s important to talk to your financial adviser about adjusting your financial plan accordingly,” says Naicker. Consistent check-ins will allow you to make a step change early on.

2. Pause and reflect 

Naicker advises mindfulness. Knowing what you want to achieve and why are key to keeping yourself on track towards achieving your goals.

“By pausing and reflecting you give yourself time to detach from the part of your brain that acts on impulse. Instead it becomes a time to objectively identify achievements or learnings and what these mean for your plan,” says Naicker. You are also likely to realise that setbacks are opportunities to fuel lasting behavioural improvements and resilience.

“It’s also comforting to know that you are not alone. According to the 2018 Old Mutual Savings & Investment Monitor (OMSIM), 81% of us have cut back on entertainment and eating out over the past year. We are all reviewing our finances to adjust our spending habits.”

3. Turn inspiration into action

“Take action towards setting your goals in motion. Create a financial plan and begin putting solutions in place that help you achieve your dreams. Whether it’s protecting your income, investing for future holidays, properties or retirement, or even taking a sabbatical, get started as soon as possible to give yourself the best chance of success. Building consistency is key.

“If you’re unsure about where to start, or what the most appropriate financial vehicles are, get advice from an accredited financial adviser. With the right plan of action and practical, achievable steps, you can get closer to achieving your goals.”

4. Leverage tools and technology to stay alert 

Having the right tools in place can help you identify and maximise opportunities such as year-end top-up contributions to retirement annuities and tax free savings accounts (before the tax year end at the end of February), and your free annual credit record report. Downloading the free 22seven app will deepen your insights into your own spending while also helping you keep track of your daily finances. Leverage these tools to kick-start your journey to financial wellness or sustain the momentum.

5. Make the rest of the year count

According to the 2018 OMSIM, if you are saving for emergencies, you are part of the responsible 43% of people who are. However, if you are part of the 57% who are not, Naicker says that it’s never too late to incorporate an emergency savings plan into the rest of the year’s financial to-do list. “Talk to your financial adviser – they’re a close ally on this journey toward achieving your financial goals,” says Naicker.

She explains that a good adviser can help you build a holistic plan that should not only include a savings and investment strategy, but also ensures that your ability to earn an income is protected. They will also assist you with finding practical ways to maximise your savings while balancing your current spend.”

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