Make a fresh financial start in 2017

Just like your health, your investments can benefit from some New Year’s resolutions.

Pretty much everyone was happy to see the back of 2016. It was filled with political and financial turbulence and uncertainty, but there is no need to be caught up in the drama this year if you stay focused on your long-term goals. If you feel you made financial and investment mistakes last year, you can get back on track with this checklist. Are you able to answer “yes” to all these questions? If not, make a (late) resolution to yourself to set it right.

#1 Do you have a financial adviser?
If you already have a retirement annuity (RA) or pension fund that you are contributing to through your work, signing on with a financial adviser can seem excessive. But winging it could leave you with a shortfall at retirement. Working with a financial adviser as early as your twenties can help you achieve your long-term goals (the longer you leave it the tougher it is to catch up), but there are also certain life stages that really call for a new examination of your finances.

If you recently got married you may need advice on how to manage your money as a married couple and look at your investment strategy as a pair. If you’ve recently become a parent, you may want to consider an education fund, will and life insurance. If you’re looking to purchase a house or start up a business, a financial adviser can assist you with planning, and suggest how to reprioritise your income without losing sight of your retirement goals. In short, they can help you with a financial road map, take the hassle out of the investment process for you and give you a professional, unbiased (if they’re independent) and unemotional opinion.

#2 Have you been saving enough for retirement?
It’s one of those nagging questions that few of us want to confront. If you have underinvested in your twenties and thirties, you can feel like you want to stick your head in the sand and hope that you’ll get a windfall to make up for your lack of savings. It’s time to face the fear! You may be surprised how achievable your goals are when you investigate them. Try Prudential’s new Retirement Calculator Tool, which will guide you in growing your net worth.

#3 Have you built an emergency fund?
Living from paycheque to paycheque may not work for you forever. Life throws up curveballs, and you need to have some financial wiggle room to deal with them. Simply saving money in your cheque account can take huge discipline (it’s always tempting to dip into it), so the best option is to ensure you put the money away each month into a separate investment vehicle like a unit trust fund that will help grow your cash, but also give you quick, easy and penalty-free access when you need it.

#4 Is your asset allocation aligned with your goals?
They say 50 is the new 40 (and 40 the new 30), and while this may be true when it comes to fitness and health goals, you need a reality check about your situation when it comes to your investments. A fund that worked for you when you were a responsibility-free thirty-something may be too risky now that you are in your forties with three kids and a business to grow. Prudential’s new Goal Calculator Tool helps you define and achieve your goals, while also determining what monthly investment contribution is required to meet your goal within the specified time period.

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If you aren't already investing with us, contact your financial adviser or our Client Services team on 0860 105 775 or at info@prudential.co.za.