If you find that your new year’s resolutions never last until February, or you find yourself promising that your diet starts next Monday, then your only financial goals are probably to have financial goals. You are not alone, in fact you are in the same boat as many others. Unfortunately that boat is sinking fast!

So many of us leave our long term financial planning until it is way too late and we will end up working past retirement, becoming dependant on our children to survive when we can’t work anymore. Many experts will tell you to start with short term goals like a paying down debt or a new flat screen TV, move onto some medium term goals like education or a home, then look at your retirement planning. Although many experts may not agree that you should start with retirement planning, it is in fact important, and this is why:

Retirement

We are an instant gratification nation, using terms such as ‘I want it, and I want it now’, making long-term planning nearly impossible. We would rather have a nice big flat screen TV and a new car, so we put off what may be the most important saving of all, saving for retirement–the 20 years between 60 and 80 when most of us won’t have any income.

Look at the cost of living now, think about how much things will cost in 20 or 30 years from now. How will you survive? Are you putting enough (anything) away now that will ensure you live a similar lifestyle when you retire?

This takes us back to basics. You need to set financial goals. Your life stage needs to play a role when you set your goals, if you are young and at the beginning of your career there’s more time and you can address short, mid and long-term goals at the same time. If you have left goal-setting until your 40’s then you may have to focus on aggressive investment so that you can put away enough money to retire with some kind of fund to support you.

Manage your money

Start with money management, create a budget and stick to it. Budgeting will teach you where your money is going every month and help you identify where small financial behaviour changes can free up extra cash so you can set it aside for the other goals you want to set.

Create an emergency fund

Saving towards an emergency fund is important – experts recommend three month’s salary put into a high interest bearing call account. This fund will help you to bridge financial gaps such as unexpected expenses or retrenchment.

Invest to save

Putting down a deposit on a home or a car will bring down your monthly repayments. A home is also a good investment as its value will grow over the years.

Insure

Don’t forget to insure. Insure your life so the ones left behind are not left with the burden of your debt, and insure your assets. Too many consumers spend large amounts on their home, car and gadgets but never insure them. You don’t want to be paying for that item long after its been stolen.

Get advice

Don’t let goal-setting and investment scare you off. If you are unsure where to start then contact your employee wellbeing programme or speak to a CFP, a Certified Financial Planner who is an investment specialist who will take your goals, means and dreams into account and set a financial plan for you that you can review annually.

Get some expert advice, plan, plan, plan and live a comfortable life well into retirement.

References

http://www.kudough.co.za