If you’ve come up with a sound and resolute long-term financial plan that you’re sticking to, then congratulations; you’re already doing better than most. If you haven’t — don’t worry; you’re certainly not alone.
If you have some sort of plan in place, hopefully you’ve figured out a budget, optimised your spending and have begun to build some level of savings. These are three financial practices that will stand you in good stead throughout life — however, that doesn’t mean you shouldn’t occasionally review them.
Any financial plan you create is bound to be based on your financial priorities of the here and now. Of course, times change, so shouldn’t your financial focus? Here’s three reasons why it makes sense to re-evaluate your money from time to time.
Life’s key moments require different approaches
Naturally, a lot of financial planning comes in tandem with big life moments. Right now, you might have laid out a budget and savings goals that adhere to buying a car or taking a trip of a lifetime. You know how much you’ll need and will have adjusted accordingly. But what happens when you’ve achieved those things? It’s time to move onto new plans, thus time to adjust your finances.
Three obvious big life moments spring to mind: getting married, buying a house and having children. While all financially significant, each come with different financial demands over varying timelines. Stumping up the cash for a wedding differs from the long-term commitment of having children. Ahead of these big moments, it’s time to reflect on where your money is best directed.
Is there anything you can be doing better?
As technology and methodology change over time, so does best practice. Consider what financial aids we have available to us now versus those only 10 years ago. The rise of mobile banking and personal finance apps mean that managing your money is easier, quicker and more efficient than ever before — the question is: are you taking advantage of these tools?
Likewise, have you any long-term investments bubbling away in the background? How are they performing? Are there better opportunities out there? Again, technology has us better equipped than ever to understand what’s best to do with our money, so why not use it?
There’s an often-used term, particularly in the business world, of “never get too comfortable”, and that should be your premise when approaching your finances. Even if things are looking good, there’s always something to improve.
What matters most to you?
Finally, big moments and technology aside, what about changing your financial priorities as per your priorities in life? There’s no doubt that, as you grow older, your tastes, preferences and points of view change, all of which may affect your spending and saving habits. For example, as a young adult, you’ll likely be much more trigger happy with your spending, before settling into a more savings-friendly attitude as you get a little older.
Don’t be afraid to adjust your spending plan to make yourself happy. If you want to give yourself a little more disposable income for a while, do so. If you don’t feel like you have anything you want to buy at the moment, tighten the belt on your current account. The bottom line is you are adhering to a financial structure in order to make yourself happy, so it’s okay to change your financial priorities just because you want to.
In the end, there’s no real harm in sticking to a plan based on a certain set of financial priorities. However, if you make your planning adaptable to changing priorities, you’ll likely find better value in your financial structure in the long run.
*Collaborative post