Now may be a good time for a financial health check

The reason for reviewing your budget is that some of the assumptions you made at the beginning of the year may no longer be true.

It’s the time of year you think about putting a thicker duvet on the bed, dusting off the heater and perhaps getting a ‘flu shot.

It’s also a good time for a financial health check.

Many of us consider our financial position at the beginning of the year and resolve to try and pay off debt, save a little more and perhaps invest some money, but six months later we have forgotten our good intentions.

Marlies Kappers, head of marketing at financial services provider, DirectAxis, suggests that early in the year, when you’re still enthused and committed, is the best time to pencil in a date for a financial review.

“Even if you haven’t planned a regular financial assessment, it’s a sensible habit and halfway through the year is as good a time as any.”

Here are three things to consider when you do.

Assess your financial goals

When considering your goals, be practical and realistic.

If you’ve been a couch potato all your life you wouldn’t start a fitness programme by entering an Ironman.

Also read: Prepare for a tariff hike

You might begin running, cycling and swimming smaller distances and build up your fitness levels in each discipline.

The same applies to your financial health.

Setting too many goals can be as bad as one, huge unrealistic goal. Rather set two or three. This makes it easier to stay focussed and track progress.

Reaching attainable targets will give you a sense of achievement and will encourage you to continue improving your financial wellbeing.

It’s better than giving up because you’ve tried to do too many things at once or been too ambitious.

Ask yourself if the goals you set at the beginning of the year are still achievable. Be honest.

If reaching your savings target will only require a little belt tightening in the second half of the year, then stick to your plan.

Similarly if you’re easily going to reach it, perhaps you need to set yourself a stretch target.

Check your credit score

Everybody from banks to retailers, landlords to car dealers decide about your financial dependability based on the three figures that comprise your credit score.

Think of it as the printout from an ECG, the machine used to check your heart rate. It provides an indication of how consistent and reliable you are financially.

By law you’re entitled to one free credit report a year from any of the credit bureaus.

The problem for many people is that, like the readout from an ECG, unless you’re an expert these can be difficult to understand and usually don’t give you much information on what you can do to improve a poor score.

Fortunately there are alternatives.

Review your budget

It’s something even the finance minister does – he calls it the mid-term budget review.

The reason for reviewing your budget is that some of the assumptions you made at the beginning of the year may no longer be true.

For example VAT has gone up and the cost of fuel has increased. This may mean you’re spending more than you anticipated and might need to try and cut back further in order to reach your other financial goals.

Think again of the triathlon analogy. Halfway through your training programme, you may have reached your running and cycling targets, but are struggling with the swimming.

You can either focus on running and cycling and hope that better times in these will make up for the time you spend in the water, or you can get some expert help to improve your swimming times.

Similarly when your review your budget you may find that you’re on track with paying off debt but aren’t saving as much as you’d intended.

You might look to see where else you can save on monthly expenditure to make up the shortfall, or speak to a financial advisor.

“Whether you’re planning the equivalent of a financial Ironman or just want to get fit and lose a few kilogrammes, it’s helpful to set some goals and regularly assess your progress. It increases the chances that you’ll stick to your plan and ultimately achieve your goals,” said Marlies.

Do you want to receive news alerts via WhatsApp? Send us a WhatsApp message (not an sms) with your name and surname to 061 718 4438.

Please read our WhatsApp broadcast list disclaimer.
Join the conversation on Facebook, Twitter and Instagram

  AUTHOR
The North Coast Courier

Latest News

COMMENTS

Top

Thanks for your referral. We have no doubt your friends will love our newsletter as much as you!

Don't forget to verify your email.

to our FREE newsletter
SUBSCRIBE to our FREE newsletter.




SELECT your titles:

North Coast Courier


Get regular news updates sent directly to your inbox.

Your source of local breaking news and trending stories from across the country.

Be a part of our growing community

1MILFacebook Fans
98KTwitter Followers
5MILMonthly Readers
12MILArticles Published Every Month
72Local Community Websites
CLICK HERETo view an example of our newsletter

SUBSCRIBE to our FREE newsletter

SELECT your titles:

North Coast Courier

Get regular news updates sent directly to you inbox.

Your source of local breaking news and trending stories from across the country.

Be a part of our growing community

Subscribe Here
1MILFacebook Fans
98KTwitter Followers
5MILMonthly Readers
12MILArticles Published Every Month
72Local Community Websites
Your details:


Your friends: