The 12-month financial plan

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The biggest mistake we make when it comes to our financial goals is that we make big resolutions such as: “I will pay off all my debt.”

What you really need are small resolutions that are easier to commit to, but which help you towards achieving the ultimate goal. Choose a single action in each category of your finances and you will be surprised at what an impact that small action can have.

Update budget and plan for expenses. Photo: Supplied

  • If you want to reduce your debt, the goal may be committing to paying off one debt this year.
  • If you want to start creating wealth, commit to opening an investment account and start investing, even if it is just R300 a month. Even small contributions to your investments and debt reduction have a positive impact on your net worth (see article Know your net worth).
  • To take control of your spending, commit to a one-month spending diet during whic you will not spend any money on nonessentials.

A great way to give your finances a good shake-up this year is to follow the following month-by-month plan so that your finances and admin are all up to date by the end of the year.

READ: Money is statistically different for women


Update budget and plan for expenses:

Write up a budget. Pull out your bank statements and keep track of your day-to-day spending so you get a handle on where your money is going. Plan and save for major expenses such as school tours, a major car service or holidays.


Sort out your taxes

This is a good time to make sure you are optimising your tax deductions. You can top up your retirement annuity and contribute to a tax-free savings account. Find out what expenses you need to keep track of and start getting your supporting documents in order for your tax return.

READ: People no longer ask family and friends for financial help


Review your insurance

Shop around and compare quotations from other insurers, but make sure that you know what cover each insurer offers for the premiums you pay. You may find that one insurer offers you cheaper premiums but will charge you a much higher excess when you make a claim. Review your life assurance needs if you have had a child, are married, changed jobs, have been retrenched or received a raise.


Review your will:

Any life change such as a marriage, divorce or children will require you to update your will. If you don’t have one, write it up now.


Review your budget and create a debt repayment plan

Now is a good time to review the budget you set at the beginning of the year. Are you on track or overspending? What can you cut back on to create some extra cash? Use this to settle your debts sooner or add to savings.


Medical check

How much money is still available in your medical fund? Plan your annual preventive check-ups such as dental or your pap smear.


Focus on saving during savings month

Sometimes the hardest part of saving is opening the account. If you do not have a tax-free savings account, commit to opening one now.

Do a review of existing investments to ensure they still meet your needs. If your long-term savings are sitting in cash, you need to look at higher-growth investment options.

READ: Sponsored | Plan for your life’s Signature Moments – with solid financial planning


Think big

Set time aside to think about your long-term goals and how to achieve them. Talk to your partner about money and bring in a financial adviser if necessary so that you can plan your future together.


Spring clean

Clean your clutter and get your admin filed and sorted. Draw up a list of all your policies, accounts and investments so they are easily available in one place.


Review your medical scheme

Medical scheme increases are released this month and you have the opportunity to select the plan for next year. Compare your medical needs with the benefits you can receive and the premium you are expected to pay for those benefits.


Create a festive season plan

This is the time to plan how you are going to manage the festive season spend. Start having conversations with your family about expectations and budgets.


Be prepared

Don’t forget that you still have to pay debit orders in December and account for them before you spend any money.

Remember, it is a long way to your January pay cheque, and, after all the parties are over and the visitors have left, you still need to buy groceries and pay for electricity, among other regular costs.

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