Stienemarié Bonsma-Potgieter, CFP® – Financial Planner

A well-crafted financial plan is a cornerstone of financial stability and future success. However, life is dynamic, and our financial needs and goals can change over time. A financial plan should therefore not be set in stone and should be adaptable. Regularly reviewing your financial plan ensures that it remains aligned with your current situation and future aspirations. Here’s a comprehensive guide on what to check when reviewing your financial plan and how often your plan should be reviewed.

When to Review Your Financial Plan

1. At least once a year: Annual reviews help keep your plan on track, ensuring it adapts to any financial changes over the past year.
2. During major life changes: Significant events like marriage, the birth of a child, job changes, or buying a home necessitate a thorough review of your financial plan.

What to Review in Your Financial Plan

1. Emergency Fund: Ensure your emergency fund is still sufficient to cover 3-6 months of living expenses. This buffer is crucial for unexpected expenses or income disruptions.
2. Goal Adjustments: Assess your short, medium, and long-term goals. Have any of your financial goals changed? Update your plan to reflect these new priorities.
3. Debt and Repayment Strategy: Evaluate your current debt levels and repayment strategies. Consider whether you can accelerate debt repayment to get you closer to financial freedom.
4. Potential Savings Areas: Identify areas where you can reduce expenses or save more efficiently. This can be done by reviewing your budget and identifying unnecessary spending habits.
5. Investment Alignment: Check if your investment vehicles are still aligned with your goals. Adjustments may be needed to ensure your investments support your financial objectives and still provide the necessary liquidity.
6. Asset Allocation and Diversification: Review your asset allocation to ensure it makes sense given your risk tolerance and personal goals. Ensure you have sufficient diversification to reduce risks.
7. Retirement Tracking: Evaluate whether you are on track for retirement. This involves reviewing your retirement as well as discretionary accounts and contributions to ensure you will meet your retirement goals and income needs.
8. Long-Term Insurance: Consider your long-term insurance needs. This includes life and disability insurance to protect you and your loved ones against unforeseen circumstances.
9. Estate Planning and Beneficiaries: Review your estate plan and Will. Ensure all documents are up-to-date and that beneficiaries are correctly listed to reflect your current wishes.

Regular reviews of your financial plan are essential to maintaining financial health and achieving your goals. By addressing these critical areas, you can make informed decisions that adapt to changes in your life. Remember, the goal is to ensure your financial plan serves you well today and in the future.