Annual Financial Review

Finance is a funny thing. If your finances are even remotely complex (and lets be honest here, they all are) they need reviewing almost constantly. That is a heck of a job though. There is life going on too! It all needs to be put into a little perspective.

That said, it is still a job that needs doing. So, being the busy folks that we are, we make arbitrary judgements about timing and have a go at the review when seems logical. Coincidentally, this annual financial review usually falls at the same time as our New Years Resolutions.

Whether January is a good time to do annual financial reviews, who knows? What I do know is that a good majority of the people I have ever discussed money with review or plan a change to their finances at this time of year. Are you?

This type of task is quite obviously very individual. For many, the year end brings a flood of performance statistics to mull over. How did markets perform? How did the funds do? How did they perform relative to the index they track or are linked to? How did individual company shares perform? What will do well next year? Where is the most profitable home for your money for the next year?

For others, it might be reviewing the mortgage. I remember (back in my mortgage broking days in the UK), I would be rushed off my feet through January and February. Is the deal good? Can I save money by moving lender? Is the life assurance adequate? Does it need review?

All good questions.

For yet more still, the New Year brings a renewed intent to become more organised. Provision for retirement is high on the list of things to do and with good reason. If all goes well, we will all be retired for many years and in a good level of comfort. But who will be paying for it? I think we have all read about population demographics and how the western world is becoming older. Will a government be able to pay? Even the gold plated EU scheme seems to be under danger of review. If a company scheme like that needs revision because of the cost, what chance have normal company arrangements?

Many people make the New Year resolution to actually start doing something. That is a biggie. Life just whizzes past and each monthly pay cheque goes like the others and disposable income is disposed of. Making the commitment to start something like savings or a pension is a huge step. Day one of working towards financial security. As I said, a biggie. But we all have to start somewhere.

What needs work in your financial situation?

* This was first published in January 2004 *