Going from A to B almost hardly happens in a straight line. We know that life is unpredictable and doesn’t always go according to the plan or vision we have in mind. We may set off down a path of knowing where we are and where we want to be. We may have all the tools and resources necessary to get there, but then life happens, and something gets in the way. The resources we choose may not be adequate or fulfill their purpose. We might have a roadblock that deters us from our original path. Or perhaps we pick a passenger up along the way or drop one-off. We may have to take a break or pause to breathe. And at times, even the goal post may be moved, or it takes us longer than we originally anticipated to get to our chosen destination. Even the destination too may change.

The point is that whatever the circumstances, the ability to be flexible and adaptive to change is a necessary part of our self-growth, journey, and destination. When it comes to your financial plan, you may have an idea of what your future vision entails, and you may know what needs to be done to get there. But somewhere along the line, the plan may change. You may be single when you created your initial vision. Perhaps you got married and a new joint plan needed to be designed. Or you may have been married and along the way decided to part ways, creating a need for a new plan. Remember your life circumstances determine your financial needs and priorities.

Reviewing your financial plan helps you to adjust your plan to address changes to your needs, goals, and priorities. It also helps you to see if you are on track to achieving your desired vision and if not gives you the opportunity to course-correct.

When should you review your financial plan?

As an absolute minimum, your financial plan should be reviewed at least once a year and when your life circumstances change. These could be marriage, divorce, change in income, the birth of a child, loss of income and even buying or selling an asset not previously planned for.

Here are other factors that need to be considered when reviewing your financial plan:

  • Change of employment whether a job move, promotion, or retrenchment will impact your employee benefits and earnings.
  • An increase in income may result in higher tax liability or surplus cash could be used towards goals.
  • Costs of living increase reducing your ability to save more or spend less than you initially anticipated or may increase the costs of your initial goal.
  • The annual costs of inflation decrease the purchasing power of your money.
  • The cost of fees on your investments affects your net returns.
  • The net return you earn is linked to market performance.
  • Adding/Removing beneficiaries in your policy documents, Will, and your employer.

Several elements play a role in when you achieve your goal and whether you achieve it. Reviewing your financial plan offers some sense of certainty and peace of mind knowing that you are on track. And even if you aren’t, then you at least are keeping informed every step of the way.

If you are partnering with a Financial Advisor/Planner, then reviewing your financial plan is a key service of their value proposition to you.