5 Stages In Life When It Makes Sense To Do A Financial Review

From now till 31 May 2023, you can sign-up for a free Comprehensive Financial Planning Online Report by MoneyOwl. Simply use our promo code: DNS123. You can also arrange for a consultation with their dedicated Client Adviser for $49. This promo is limited to the first 300 eligible sign-ups and new MoneyOwl customers only. Terms and conditions apply.

We live, we dream, and we die. While money may not buy us happiness all the time, having sufficient financial resources can make life a lot more comfortable, easier and, dare I say, happier.

One way of checking that we are prepared for our various life stage is by doing a financial review. After all, we all go through performance reviews at work, some of us go through pre-marriage preparation before the wedding, but most of us don’t think about reviewing our finances before we start or stop earning an income.

#1 After The First Work Performance Review

What is there to review when we have close to nothing? When we are young and just starting to earn an income, our focus is naturally on securing that first job and earning that starting salary. Yet, when we hit our first career milestone of completing our first year of work, sitting through a nerve-wracking performance review and perhaps, even securing our first bonus, this may be the perfect time for our first ever financial review.

Similar to a work performance review, a finance review helps you clarify your direction with your finances. Do you have certain savings goals you need to meet to hit the milestones that you want?

Most importantly for young working adults, a financial review is the best time to review our insurance coverage needs. Do we have insurance policies that our parents bought for us and is the coverage sufficient? Do we have essential health insurance (such as an Integrated Shield Plan or MediShield Life)? We are also in a better position to start our insurance coverage due to our good health at a young age.

#2 Before Getting Married

Saying I do is a big step and with marriage comes the responsibility of household finances. Whether you and your future spouse plan to merge finances or not, it is important to figure out your own financial situation before committing yourself.

Do you have sufficient CPF savings for the BTO flat? Will you need to save more for the wedding and/or honeymoon? How do you plan to grow your retirement nest egg so you can grow old together??

Take it one step further and go through the financial review process with your future spouse. Money issues are one of the top reasons for divorce and it is always good to spot financial incompatibility early and take active steps to communicate and reconcile different viewpoints.

For singles, the point when all your friends start to issue you wedding invitations may also be a good time to relook your finances. Check that you have sufficient healthcare coverage including long-term care, so that you are able to take care of yourself in old age.

#3 Before Having Children

Having children is another significant life stage. With new dependents to look after, this is an opportune time to review our insurance coverage, savings and investments to accommodate the addition to the family.

In particular, would-be parents would need to think about maternity insurance and baby insurance. This is also a time to start saving towards their future education needs and maybe give them a headstart by making them CPF millionaires.

With so many areas to consider when it comes to planning your finances with a newborn, a financial review may be a great starting point to figure out how to best plan for your children’s future.

#4 When You Inherit Money Or Have A Windfall

While the odds are that most of us won’t win TOTO, the chances are that we would likely at some point in our life receive some form of small windfall, inheritance or just a really fat bonus. While having extra cash to spend is always nice, a windfall is also a great opportunity to plug any gaps in your finances.

This is also the best time to seek advice from a fee-only financial adviser who isn’t motivated to recommend you products based on their fat commissions, but advise you according to your personal financial situation and goals.

One place to seek out such fee-only financial advisers is MoneyOwl. As their advisors are fully salaried, there’s no obligation to buy a product that pays them commissions. They also represent multiple products across multiple insurers which eliminate the need to check with multiple agents representing different companies. MoneyOwl is one of the first organisations to receive the inaugural Centre of Excellence Star Award which recognises strong advocates of CFP® Certification training, which provides assurance about their advisors’ training and expertise.

If you are interested in seeking fee-only financial advice, you can use our DollarsAndSense Exclusive promo:

#5 Before Retirement

Finally, before we decide to retire and end our working life (at least before we embark on any post-retirement second career) is another checkpoint for us to review our finances.

Ideally, we should have already done some form of financial review earlier in life and we are on track for our retirement goals. Regardless, just before retirement is a good time to assess whether we need to push back our retirement, be able to dial back to part-time work, or to fully retire from the workforce.

Importantly, this is also the time to review our insurance coverage now that our dependents have left the nest. Are we still paying for unnecessary coverage? Can we consolidate our policies? For those of us who plan to leave an estate and/or write a will, this is also the time to gather our assets for our estate planning.

DollarsAndSense Exclusive:

The post 5 Stages In Life When It Makes Sense To Do A Financial Review appeared first on DollarsAndSense.sg.

Forward Philippines

Header Ads Widget

5 Stages In Life When It Makes Sense To Do A Financial Review