As a financial planner, I find that sometimes clients have a certain budget in mind and request that a single need be addressed based on their perceived economical constraint. I say ‘perceived’ because if I had to compile a simple income verse expenses spread sheet I often find majority of the expenses are extravagantly unnecessary.

Hence there is a dire need for a modification of what one distinguishes as priorities. Even if one has financial limits, an analysis is essential regardless as one will now have a clear idea of one’s shortfalls if any. It is only then that a goal can be strategised and plan can be followed through to attempt to close the gap. This plan needs to be reviewed frequently so that one does not deviate from one’s goal.

Identify your objective. Did you calculate if your risk benefits are sufficient so that your family will continue to receive the level in income they are accustomed to? (In the event of your death). Will certain major debts be paid off but an analysis needs to be conducted to ensure there are sufficient funds for their day-to-day living expenses?

You may be saving for your child’s tertiary education but have you determined the estimate of costs at the time of their studies? Will your savings plan suffice for accommodation, tuition, books, etc.? What is your retirement goal? Do you know how much you would require in a future or present value per month? Do you have sufficient capital to sustain these needs?

And if so for how long will that capital last? Five, 10 or 15 years perhaps, and then what? Will you have to dip into the capital or worst still will it be depleted? Do you have to sell you primary residence to sustain your basic needs? And what plans did you make if you have an illness in your old age coupled with your monthly financial needs?

Don’t thumb suck! Know your financial goals in monetary terms. Formulate a strategy with your financial planner and review this plan periodically. Distinguish between where you stand in life and where you are heading.