Your end-of-year financial checklist is here!

Last updated on 1st April, 2020 at 05:00 pm

Before the new year kicks off, make sure you’re on track to make it your best money year yet with our financial checklist. Here to help: financial planner Craig Williams, risk expert Karen Bongers and Sanlam Trust legal advisor David Thomson. Let’s get started!

Ready for the end of the year? We know the feeling! But before you kick back and finally enjoy that much-deserved break, take some time to assess your financial health for the past year – and to put in place a few things for the new year. Here, nine checklist items to work through.

1 Spend 10 mins reflecting on the past year

Revisiting your goals helps refuel your ambition and allows you to reflect on what you could have done better. “The end of the year is the ideal time to reassess your savings and other financial goals you’ve made,” says Williams, a financial planner. “Having oversight of these goals will provide you with direction for the upcoming year, plus how you can keep this in mind throughout the holidays.”

Some key things to ask yourself:

• Have you met your savings target for the year? If not, what prevented you from achieving this (paying off debt, overspending or poor budgeting skills)?
• As you prepare for next year, set up a meeting with a financial advisor to help you devise a plan to nail the key areas you are struggling with so you can achieve your goals and more in the new year!

2 Look into your future  

Your retirement should be at the top of your checklist. Williams advises that “a healthy retirement plan should cover at least 30 years post-retirement.” Contributing towards your retirement also has tremendous tax benefits. “The more money you contribute towards your retirement annuity, the bigger your tax reduction – which in turn allows you to add more towards your savings or boost your emergency fund,” he adds.

Is your retirement plan on track? Use this free and simple calculator to find out.

If you haven’t set up a retirement annuity yet, speak to a financial planner today to help you prepare for your future – click here to request an appointment.

3 Plan for rain (even if it’s hot outside)

In addition to revisiting your financial goals, remember to take your savings accounts and emergency fund into consideration. According to Williams, it’s easy to get an emergency fund confused with a savings account: “An emergency or rainy-day fund contains three to six months’ worth of your salary and is used for life’s unexpected circumstances, for example retrenchment or an unexpected medical bill. A savings account, on the other hand, is typically used for specific goals, such as a down payment on a car, home or educational expenses.”

If you don’t have an emergency fund, your financial planner can help you calculate a total figure you would need to save per month (taking into account your current financial situation) in order to cover at least three months of your salary.

4 Sort out those ‘peace of mind’ policies

Life has its share of curveballs and unfortunately accidents can hugely affect our lives. Ensuring that your death and disability cover is up to date is essential to provide you with ‘peace of mind’ while on the road. “Disability cover ensures that you get income protection in case you encounter an accident,” explains risk expert Bongers. Death cover helps to take of your family if you were to pass away, whereas disability cover enables you and your family to be financially provided for if you are no longer able to work. “It’s best to speak to a financial planner who will help you choose a customised solution to suit your personal needs,” she adds.

What type of cover you need and at what level will depend on things like whether or not you have dependants, if you have any debt, and your income. Typically, the sooner you are able to start contributing to policies like these, the cheaper and more effective they are long-term.

5 Double-check your travel cover

If you’re travelling overseas – especially if you love adventurous activities like diving or skiing! – check if your travel insurance has you covered and what the policy’s limitations are.

It’s also worthwhile to ask key questions such as: does your potential travel insurance cover any pre-existing medical conditions? What is the policy’s maximum pay-out amount? And are you the right age to suit the policy? Remember: always check the fine print, and ask if you’re in doubt.

6 Get into the habit of budgeting

Manage your money like a pro by getting into the habit of budgeting. “The first step is to work out your monthly net income (how much you earn after tax) and list your expenses and other costs (entertainment, clothing accounts, rent, savings etc.),” says Williams. The trick: to ensure you’re spending less than you’re earning each month, and that as part of your monthly expenses you’re saving and investing enough.

A budget helps you track where your money goes and understand what you can change to improve – take a look at this Money Diary to give you an example of how powerful budgeting can be in empowering you to take control of your finances.

Need direction creating your budget? Click here for your free budgeting template.

7 Cover your dependants, like your children

If you have dependants, such as children, things like life cover become increasingly important – it’s a way of ensuring their financial freedom should anything ever happen to you. If you will be travelling with children during the festive season, their cover is also important. “Consider a cover that can keep your little ones protected,” advises Bongers. A financial planner can help you plan for the best cover according to your needs – for example, enough cover to pay off your house so your dependants would have somewhere to live in your absence, and so on.

8 Check your will is up to date

Although thinking about it may dampen your spirit, it’s important to ensure your will is updated and stored in a safe place but where you family can find it. “Your will is a secure way to ensure that your estate is distributed according to your wishes, and that your family is well taken care of,” explains legal advisor Thomson. An updated will should contain instructions on how you would like your estate to be distributed and who you would like to benefit from your will. “It’s important to take changes in your life into account,” he adds. “Update your will as things change, for example if your marital status changes, you have children or acquire new assets, like a house or a business. That’s why it’s advisable to update your will annually.”

9 Consider your health needs

“Severe illnesses can have astronomical costs. Having comprehensive cover is important as it complements both medical aid and gap cover by paying out a lump sum so you don’t have to worry about finances while being ill, and can rather focus on your health,” says Bongers. Speak to your financial advisor for more information on how you can access the right health and risk cover for each stage in your life.

Work through this checklist with the help of an expert financial planner – click here to make an appointment.