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Conducting Your End-of-Year Personal Finance Review

When we get to the end of the year, we realise that yet another proverbial chapter is coming to a close as we brace ourselves for a new one.

This is a great time to celebrate everything we have achieved and all the progress we have made throughout the year. It’s also the perfect time to reflect on everything that has happened, the choices we made before considering what we want to differently in the future.

Not only does this apply to our daily lives, short-term goals, long-term goals and everything in between; it is also very relevant to our financial plans.

The end of the year is a great time to conduct a review of your personal financial plan. In this article, we tell you why and how.

personal financial planning

Annual Financial Plan

Reviewing your personal financial plan at the end of the year helps you to end off the year knowing exactly where you stand with your finances and it helps you strategize for the year ahead.

Conducting end of year personal financial reviews is a useful activity which helps you establish what your future financial goals are, and how effective your current efforts will be in achieving them.

With a bird’s eye view of your portfolio, you can set into motion a more targeted approach towards your biggest financial goals, whatever they may be.

Annual Financial Review Checklist

Our financial advisors in Johannesburg have put together a list of things that you should include in your annual personal finance review:

Look at Your Transactions

Understanding the relationship between your income and spending/expenses will help you formulate a fail-proof plan for financial success.

Take this time to calculate your total income for the year and then go through your bank statements and calculate what you spent; the difference between the totals will help you establish whether you are spending more than you are earning.

Knowing exactly where and how you spent your money will help you optimise your spending habits going forward. So, don’t cry over spilt milk if you realise that you weren’t as efficient as you thought you were – use this as a learning curve and be sure to make better choices next year.

Bonus tip: if calculating your income versus expenses was hard work, now is a good time to set up a spreadsheet that you keep updated on a weekly basis, so that you won’t need to spend too much time reconciling at the end of next year.

Review Company Benefits and Other Savings Vehicles

Although spending less than you earn is crucial, it’s not the only habit that will get you to where you want to be financially – you need to save too!

So, it’s important to find efficient ways to save your money as well, especially for your long-term goals and retirement.

The following are savings vehicles which deserve attention:

  • Emergency funds
  • Tax free savings accounts
  • Employer retirement plan
  • Individual retirement account

Understanding the importance of these vehicles and the benefits of each is crucial. Our financial planners are available to help you understand how to make your savings work for you.

Think About Tax Planning

Although tax season is only in a few months from now, it’s never too early to think about how you can reduce your tax burden.

Think about donating to a charity, join an affordable medical scheme or claim a home office deduction; these are all ways to minimise your annual tax burden.

For more tips on effective tax planning, click here.

Look at Your Insurance

Our circumstances are constantly changing, which means that whatever was suitable last year may not be suitable right now.

For this reason, it’s important to take a look at your insurance policies to ensure that you and your family are adequately covered and protected.

Whether it’s your car insurance, life insurance or income protection, make sure that the policies you have in place are sufficient enough to protect you the way they are meant to.

Olemera – Personal Financial Planning & Financial Advisors in Johannesburg

The end of the year brings with it many feelings and emotions, but it also brings opportunities to reflect back and find ways to improve our strategies going forward.

Our financial planners in Johannesburg can help you review your personal financial plan before putting together a sound plan to take you into next year with unshakeable certainty that your financial goals are not out of reach.

Contact us to find out more.

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