Good financial planning will go a long way in providing for your family and ensure that you have enough for everything and more.
By asking yourself the following questions, you can ensure that your money will go a longer way in caring for your family:
1. Do you know your financial health?
Take stock of your finances by listing your total assets and liabilities. Your assets would include stocks and bonds, as well as your bank savings. The list of liabilities would include credit card debt, home mortgage and other loans.
2. Do you keep a record of your spending and income?
Keep records of your bank statements, credit card expenses, insurance policies and other important documents such as CPF statements, mortgage contracts, income tax returns and loan agreements. Such records will enable you to get a clearer understanding of your spending habits so you know where your money is going every month. By knowing what you spend on, it would be easier to identify where to curb spending.
3. Do you have a family budget?
Keeping a budget would help discipline yourself to spend within limits. Start by paying off loans and liabilities, before you spend the rest of the money. Before making any commitments, such as paying for a family trip, or renovating the house, make it a point to work out the sums first to ensure you can afford it.
4. Do you shop around for the best deals?
One of the most straightforward ways to save money is the shop around and compare prices. This includes taking on new loan facilities, or purchasing items such as toys, household appliances and other consumer items.
5. Do you have clear financial goals?
Having a clear set of financial goals can help you to prioritise your spending to achieve big ticket items such as a new car, a new house or an education fund for the kids. You can work towards these goals by a combination of savings and investment.
6. Do you review your finances regularly?
As your family grows, so will your financial goals change. For instance, saving up for a new home may seem less important than saving up for your child’s education as he or she gets older. Is your existing insurance coverage sufficient to cover the whole family? What about your retirement funds? All these and more will change with time and a regular review of your financial needs would help you adjust your financial plans accordingly.