Tips for Spring Cleaning Your Finances

Thu, September 3, 2015 09.45 clock

Credit: stevepb / pixabay.com

September opened in spring, in anticipation of new and beautiful things in the air. The month also brings the national Financial Planning Week (7-11 September), and is a great reminder to consult a financial advisor and do spring cleaning your finances.

"Financial planning is the process of organizing their finances optimally to the financial risks to which they are fairly and for the goals that you have way," says Riaan Strydom, financial advisor at PSG wealth, Mill Park, Port Elizabeth and Financial planner PSG 2015. Here are five tips to consider when spring cleaning your finances.

Favor

The main risk we all face losing our income, or at least the opportunity to earn income. This can occur due to death, temporary or permanent disability, serious illness, or when retirement rolls around.

"It is important to identify their priorities clear to structure a financial plan, the goal is to have the money to allocate to deal with the risks that you and your family face," Strydom said.

Assess

Once you have identified your priorities, assess the potential impact of these risks occur. Is there to solve debt? How much of your income to replace, and how long? Should future issues, such as his his death for their children's education or inheritance tax?

"The answers to these questions will affect how your financial planner to make analysis of financial needs," says Strydom.

"The results of this analysis will show how the cover additional risks or savings needed ... or, to resolve in other words, how much it will cost any problems or gaps in your plan."

Budget

Once you know how much it will cost, it is necessary to allocate funds from its budget to achieve their financial needs and objectives. Strydom says the importance of a household can not be overstated.

"Many people that I have absolutely no idea about what they spend their money. An adequate budget will guide you through your financial decisions in day to day, and to provide a framework for predicting the goals of your financial planning."

It can not affordable for all, to carry out the recommendations at once, so treat them in order of importance.

Review

The responsibility for monitoring and reviewing your financial plan is in touch with you and your financial advisor.

"A good financial plan should only be changed if your circumstances change," Strydom said. "There is no way that your financial advisor to find out if you do not, then make sure that the communication between you goes both ways."

The best-laid plans can be ineffective or outdated if, for example, change their occupation or begins, without informing your insurance company, as required by his contract smoke. This could lead to a claim is denied, or gives a smaller amount than planned.

Recording

Retirement is the only event, we hope that we will be able to pay one day retirement assets crucial for proper.

"Saving is what you do before you spend, not what you're left with the little money over at the end of the month to do."

This requires a structured and disciplined as part of the budget approach. As already mentioned, it is not change your budget if your circumstances have changed. The same applies to its strategy of long-term investment. The recent volatility in the global markets, called into question the relevance of our investment strategies.

"However, provides a well thought out investment strategy for these events, so stick to your plan, and you will be rewarded," says Strydom.

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