Financial Planning can be overwhelming at the best of times. Come back from a road trip and good luck with the car valet getting sea sand out of the car seats. The boogie board purchase went on to an already loaded credit card and school fees have been upped 9%. year on year, and junior is only in grade 3.
An updated will is the cornerstone of financial planning. Thats a good place to start in January. If your circumstances have changed its NB to at least update your will. Make sure guardians have been discussed with Aunty Sally-you don’t want to surprise Sally if you and hubby pass away, and now Sally has become junior’s official guardian. If you decided on a divorce over Christmas, your will needs updating too. You may not want “miss” hot pants inheriting.
February is a good month to make sure your RA is topped up. You are allowed to contribute up to 27.5% of taxable income capped ta R350 000. If you want the cash, then pay the tax. Really, who wants to pay tax!!! You want a refund when the tax season opens then top your RA. This is a great way to save for retirement.
Budgeting is important and the first quarter is a good start. Where to cut costs? Examine your risk cover. Both short term and long-term insurance can be analysed by an independent advisor who has your interests at heart. Be careful of the insurance salesman who sells only for the company in blue.
You may want red or green and he pushes you blue.
Medical Schemes annual cover increases more than inflation. Once again, work with a health care consultant who understands your needs and can provide an appropriate solution. If you want a hospital plan, then accompany that with a gap cover (not expensive)
Remember debt destroys wealth. It also doesn’t go away, so don’t bury it under the carpet.
Pay extra into your mortgage bond. If you gross up the interest on the debt (don’t get a tax break on a mortgage repayment), it’s a high amount. The sooner you pay off your debt, the sooner you are to financial freedom.
The second half of the year you can get into investment planning. Local is not so lekker. Look to go offshore for wider investment opportunities, especially in the AI space. Please work with a professional who can align your appetite for risk with the right plan.
Trust is at the heart at what you do with your money. Trust the company and the advisor.
If you are not sure ask a loyal friend for a recommendation.
Would you go on the internet to look for a doctor?
Created by: Darryl Bennett CFP®
