Deciding when you need a financial review can be tricky. Your financial plan is something which should be regularly updated and may change based on your situation, goals and any obstacles that may present themselves throughout your life. This blog looks at how often you are likely to need to update your financial plan through a financial review process but if you still have any questions about financial planning then please do not hesitate to get in touch with us via email or by telephone on 01752 666165 where we will provide a transparent and high quality service for all your financial planning and review needs.
There are no rules as to how often you should have a financial review but most people decide to completely audit their finances once a year. This blog will outline some of the key life events that may make you reconsider your finances and therefore also your financial plan and what to consider when you do decide it’s time to make a change.
Have your personal circumstances changed?
When putting together a financial plan, you should think about how you and your dependents would manage if something were to happen to you. Has your personal situation changed recently? If so it might indicate that now is a good time for a financial review.
Now the world and economy is starting to return to some normality from the Covid 19 pandemic, which caused changes in financial position and income for many people; it might be the perfect time to review your wealth. Other changes in personal circumstances that may trigger you to consider altering your financial plan may include; getting married or divorced, having a child, changes to your income (getting a new job, promotion, losing your job or your business closing), retirement, heritage or a significant change in your health status.
Once you have decided a review of your financial plan is in order, below are some of the things to consider.
Have your financial goals changed since your last financial review?
Any well thought-out financial plan will detail both short and long term financial goals. By regularly reviewing these and noting any progress towards them you will be much better placed to adjust your financial plan accordingly. You may also want to consider factoring in inflation when it comes to setting long-term goals but try to keep your goals flexible as life is unpredictable and having rigid goals may only make things more stressful.
Whatever your financial goals, monitoring your cash flow is crucial. Monitor your income vs your expenditure to make sure you have enough savings. It can really help to keep track of your expenses to make sure you are spending your money in areas of priority and to keep hitting those savings goals. Check your online banking account app, most will now have some sort of tracker to help you monitor what comes in vs what you spend.
Is your mortgage still working for you?
Quite often, there are simple steps you can take to help reduce your mortgage payments if you think you could be paying too much. Alternatively, you may want to look into reducing the term of your mortgage, potentially saving you lots of money in interest in the long run. Our financial advisors are equipped to help you identify whether altering your mortgage payments could help you better reach your financial goals.
Could you do more with your investments?
If you hold any investments it is a very good idea to keep a close eye on how they are performing and, if any issues arise, what action should be taken to move your wealth or sell your shares. Things to think about include if you think the fees are too high, the investment is not performing as anticipated or if it simply isn’t a suitable investment for you any longer. Alternatively, you may decide that investment is something you’d like to look into – something we can also help with.
It is strongly advised that more risky aspects of a financial plan, such as your investment portfolio are reviewed with increased regularity, at least twice a year. Before you invest any wealth, it is always worth remembering that money can be tied up in investments for a number of years and might not be immediately available to you should you need it.
We have plenty more information on investments, email us for more information or visit the investments page.
Are you considering equity release or funding long-term care?
Equity release and funding long-term care are large financial decisions which will require careful planning before you need them and likely require some additional help and expertise from our team. They need to be factored into any review of your finances to ensure you are well prepared for the future.
There are also plenty of pitfalls when it comes to these financial products, particularly with equity release, instead of which you may have several alternative options to consider that could save you and your family money. You can read more about whether equity release is the right decision for you on our blog.
Do you want to reduce your inheritance tax?
After paying tax throughout your working life before retirement, we strongly feel you shouldn’t have to pay more through your estate after you’ve passed. Our team can help you reduce or even completely mitigate the amount of inheritance tax on your estate which can all be considered within your annual review.
Do you know enough about the status of any private or Government pensions you have?
Ensuring you know how much you have in your pension pot is essential when planning for your post-retirement future. You should regularly review the status of your pensions. Coast Financial can help you choose the right person for you, email us for more information or read our free guide.
Smaller jobs you can do more regularly to help keep on top of your finances.
The frequency of financial review processes can vary. As well as an approximate annual review of all your finances and a bi-annual review of more volatile investments there are things you can do each week and each month to keep you on track.
- Check your bank account and credit card statement weekly
- Check your credit score monthly
- Review your expenses and savings monthly when paying any bills
Doing these small jobs with increased frequency will make your annual financial review less daunting and less work when it comes to it. But, when to do your financial review? Again this is all down to individual choice, a lot of people like to carry out reviews at the start of the year but there really is no reason you can’t start at any point in the year, including right now if Covid 19 has impacted on your finance.
Remember that we can help answer any questions you may still have or provide you with any information about the process of financial planning and review, so please do not hesitate to give us a call or pop us an email. We can help implement effective financial plans with independent advice.
