Personal investing

Are you on track to achieve your 2017 financial goals?

With 2017 in full swing, make sure you stick to your new year’s resolutions when it comes to your personal finances with the below five-point checklist.

2017 is the year you made a new year’s resolution to get a handle on your personal finances. So you set yourself up for success by establishing your short- and long-term financial objectives, and put a plan in place to achieve these goals. But sticking to your savings plan is often easier said than done, and with a few months already into the year, how do you know you are on track to achieve your goals? 

Use the five-point checklist below to ensure you don’t fall off the savings’ wagon.

Step 1: Adopt a savings mentality 

Whether you earn R4 000 or R40 000 a month, the only way to save is to spend less than that amount. It may be really tough to make space in an already-stretched budget, but taking steps to develop a savings habit, or a lifestyle of saving and living within your means, is important to reaching your financial goals.

If you commit to investing via a monthly debit order, consider increasing the annual percentage increase upfront, as this will help you to slowly increase your contribution without having to think about it. Consider not upgrading to the latest car model and saving at least a portion of any windfalls you may be lined up to receive this year.

Step 2: Account for potential life changes

Are you are going to go through any big life changes this year that may require a change in financial direction?

Marriage, children and retirement are all examples of big milestones that should reflect appropriately in your financial plan. Each life stage may mean a change in financial needs. You may need to save more, or start drawing an income, which means that your investments need to be aligned with these goals.

Step 3: Reduce your tax load

By investing in a tax-free savings account or increasing your retirement savings, you could benefit from tax exemptions.

Since 1 March 2016, SARS has increased the tax deductions from retirement savings from 15% to 27.5%, which means you can save more for your retirement and be taxed less. Also, the annual allowance for tax free savings accounts was increased as of 01 March 2017 from R30 000 to R33 000, meaning that you can save more money and benefit from tax-free returns.

Step 4: Assess your investments 

Your future financial well-being depends on how well you are invested.

You need to ask yourself if your long-term investments are aggressive enough to earn you sufficient returns, while at the same time are safe enough to protect against loss. Over time, your investments may have reached a risk level that makes you feel uncomfortable or your portfolio may have become imbalanced. If this is the case, speak to a professional adviser to ensure that your investments are working for you. Cue step 5.

Step 5. Get advice

If you’re feeling daunted doing a self-check on your own, it’s probably a good idea to seek advice. A good financial planner can help you make sense of your personal finances and ensure that 2017 is a happy new year after all.

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