The uncertainty of South Africa’s 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 the financial planning and money goals they’ve set to achieve.
“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.
Ochse shares some of Dos and Don’ts when making some financial planning adjustments based on the money goals you’ve set for 2023:
Dos
- Introspect: This step involves balancing your thoughts, feelings, and finances. Evaluate your financial well-being to determine whether you are happy or not. Look at possible improvements that can 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, then start noting some of the unnecessary spending. This way, you can jot down a new mid-year review budget based on your income and expenses while making realistic money adjustments in line with achieving your financial planning goals.
- Trim down your money goals: If you had 10 financial planning goals you set for yourself this year in your diary or vision board, it’s worthwhile to trim them down to five or six. This will ease off 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’s okay to change the initial timelines you set for achieving your money goals. It is also okay to be more adaptable to your needs, regardless of what the situation may look like. Try to have a growth mindset when it comes to your goals.
- Check in with your financial advisor: They will be able to assist you in an objective way and help you through some of the questions that you may have. It is a good idea to review your total financial plan on an annual basis.
Don’ts
- Don’t take up more credit unnecessarily: When people find themselves in compromising financial situations, they usually think taking up more debt or credit to supplement their current cash flow is a viable option. Consumers are advised to reach out to their bank or financial services provider to see what options are available to avoid defaulting on their current credit accounts, 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 ever imagined should anything happen to your home, car, health, or life.
- Don’t cash out your savings and investments: The money you’ve saved up and invested in the long-term should not be dipped into for 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: Yes, life happens, but you are not a failure, so don’t ever give up on your financial planning goals. Delay is not denial.
