The uncertainty of the South African economy and the risks attributed to the unstable performance of the Rand, as well as the current market volatility, seem to leave a lot of consumers, savers, and investors feeling uneasy about what the rest of the year will look like for their financial planning goals.
“Many South Africans can remember the 2008 global financial crisis that resulted in high-interest rates and inflation in South Africa. During that period, it was important for consumers, savers, and investors to re-evaluate their financial planning goals while trying to stay afloat.
“People had to make serious money management considerations to stay on track with paying their home or vehicle loans and keeping their insurance policies up to date. This background is a reminder that those who take time to re-evaluate and adjust their finances can survive tough times,” says Ester Ochse, Product Head, FNB Integrated Advice.
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She shares some dos and don’ts when making financial planning adjustments based on the money goals you have set for 2023:
Dos
• Introspect:
This step involves balancing your thoughts, feelings, and finances. Evaluate your financial well-being to determine whether or not you are happy. Look at improvements to help you be in a better or more comfortable financial space.
• Review your budget:
Print out your banking statement or review it digitally from your cellphone banking app. Start noting the unnecessary spending. Jot down a new mid-year review budget based on your income and expenses while making realistic money adjustments in line with your financial planning goals.
• Trim down your money goals:
If you had 10 financial planning goals you set for yourself this year, it is worthwhile to trim them down to five or six. This will ease the pressure, also bearing in mind that there are other key financial priorities that you need to attend to, based on your current financial situation analysis and needs.
• Adjust the timelines of your money goals:
It is acceptable to change the initial timelines you set for achieving your money goals. It is also good to be more adaptable to your needs, regardless of what the situation may look like. Try to have a growth mindset in your goals.
• Chat with your financial advisor:
They will assist you objectively and help you through the questions you may have. Review your total financial plan annually.
Don’ts
• Don’t take up more credit unnecessarily:
When people find themselves in compromising financial situations, they may think taking up more debt or credit to supplement their current cash flow is a viable option. Reach out to your bank or financial services provider to investigate your options to avoid defaulting on your current credit accounts and home or vehicle financing payments.
• Don’t cancel your insurance:
As tempting as it might be to cancel your household, vehicle, life, or medical insurance, don’t give in to the thought. It will cost more stress and money than imagined should anything happen to your home, car, health, or life.
• Don’t cash out your savings and investments:
The money you saved up and invested in the long term should not be dipped into short-term needs or emergencies. It is advisable to build a separate emergency fund for short-term needs.
• Don’t make knee-jerk decisions:
Staying the course of your investment plan is important. Do not make rash decisions about your investments. Remember that what matters is time in the market, not timing the market.
• Don’t give up on your financial goals:
Life happens, but you are not a failure. Never give up on your financial planning goals. Delay is not denial.
“The financial well-being of our customers is important to us, which is why we advise consumers, savers, and investors to take the time to consult with their financial advisors at their financial institution so they can make well-informed financial decisions when getting through the money goals set for the coming months of the year,” said Ochse.
