It’s the time of the year again when you’ll be starting a new mindset aiming to get better than the old you. Whether you follow a new diet plan (again) or try some new things to enjoy, you can’t ever deny that you’re also thinking on how you’ll maintain your most favourite thing inside your pocket: your wallet.
Funding Force is here to give you a financial checklist that will help you get your financial priorities this 2021.
Plan your financial goals.
People who are creating detailed and specific resolutions are more likely to achieve their goals than others who don’t. Are you trying to consolidate your debt? Are you saving for your first home? Do you have a specific timeline? Like six months or six years?
The important thing is that you should set specific short-term and long-term goals and determine the steps on how you’ll be able to achieve them. I recommend you to use this method: SMART (specific, measurable, achievable, results-focused, and time-bound). Saying a generic phrase for your goal (e.g to save money) is not effective and attainable. You should set a specific goal, for example, $900 in three months. That means you’ll need to save at least $300 per month. These types of metrics are one way of monitoring your goals if you’re accomplishing them or not.
Understand your retirement investment plan.
What is the ideal age for you to retire? How much money will you need to sustain your living for the rest of your life? These are the must-answered questions for you to set a target for your retirement goal. But if you’re having difficulties navigating your retirement plans, you can hire a financial planner that could assist you on that matter.
In case you’re eager to save more for your retirement plan, you can always increase your contributions to your mandated financial plan.
You should check your portfolio annually. The grouping of your investments needs to maintain its allocation or make some amendments if there are changes that appeared prior to your goals. e.g buying and selling of portions from your portfolio and adapting to the risk management and other strategies.
Other cases, rebalancing is just a quick and easy thing to do. Otherwise, it may require some more patience and help especially from your financial planner.
Constant increases from your emergency fund.
For those who just made up their mind and realised that saving money is a must. Then you can start saving little by little. We know it’s a hard thing to do especially if you’re facing a lot of bills to pay but don’t worry, any amount of savings will be beneficial as time goes by. Just aim to increase it from time to time until you save the equal amount of your monthly expenses until you manage to improve it from 1 month to 2 months, so on and so forth.
Review your beneficiaries.
Reviewing your financial and health documents are important. As time goes by, a lot of things could happen especially in your relationship with your beneficiaries. The trust and comfortability with someone who will inherit your finances might change through time and certain circumstances. Maybe your relationship with your spouse has come to an end or you had a huge conflict with your loved ones. Situations like these should put into consideration.
Be insured – Insurance coverage.
There are 2 types of insurance – Auto insurance and Life insurance.
Let’s tackle first the Auto insurance – this insurance is mandated by the law as part of the homeowners’ policy. Auto insurance provides the protection when uncertain times happen in the properties you’re affiliated with. It covers the financial loss/damage from a crime (theft) or accident.
The other one is Life insurance – this insurance provides financial assistance for your beneficiaries at the event of your death. It will shoulder the funeral costs and other expenses. Note that all of this is tax-free. One of the reasons that a lot of people tend to ignore this insurance it’s because of the time-consuming and exhausting process behind it. However, if you’re dealing with debts, assets, dependents and spouse then I strongly recommend you to acquire this insurance.
Having these insurances is the most practical way of financial preparedness in times of uncertainty.
