Ladies and Gentlemen,
Good afternoon!
We’re here today at the end of our 30-day journey. We’ve explored various dimensions of financial wellness, and today, we’ll discuss a critical aspect of your financial journey: “Regular Review and Updating of the Financial Plan.”
Now, let’s start with a simple truth: life changes. And as life changes, so do our financial situations, our priorities, and our goals. Regular review and updating of your financial plan is not just recommended – it’s absolutely necessary.
Let’s delve into this with some real-life scenarios:
- Life Insurance: Consider the case of Michael, who recently welcomed his first child. With the birth of his son, Michael’s responsibilities and financial obligations have significantly increased. It’s essential for him to review his life insurance policy and ensure that it’s adequate to support his child’s future if something should happen to him.
- Retirement Savings: Think about Sarah, who has been contributing to her retirement savings diligently. However, she recently got a promotion with a significant pay raise. This is a perfect time for Sarah to review her financial plan and consider increasing her retirement contributions to match her new income level.
- Emergency Fund: Remember Tom, who experienced a costly car repair. This incident drained his emergency fund. Tom must review his financial plan, adjust his budget, and rebuild his emergency fund to prepare for any future unforeseen expenses.
These examples demonstrate that life events drive the need for a review. However, even without significant life events, a periodic review, at least annually, is good practice. So what should this review entail?
- Reassess Your Goals: Are your financial goals still the same as when you first created your financial plan? If not, it’s time to redefine these goals.
- Check Your Budget: Is your current budget still working for you? Do you need to adjust your spending or saving habits?
- Review Your Investments: Are your investments performing as expected? Do they still align with your risk tolerance and time horizon?
- Evaluate Your Insurance Coverage: Is your insurance coverage still sufficient to protect you and your family from potential financial risk?
- Update Your Estate Plan: Has there been any change in your family situation that requires an update to your will or beneficiaries?
The purpose of a review is not just to update the plan but to ensure it’s working for you. A financial plan is not a set-and-forget strategy; it’s a living, breathing document that should grow and evolve with you.
To end today’s discussion, I want to leave you with this: “A goal without a plan is just a wish.” And a plan without regular review and updating is unlikely to succeed.
So, commit to reviewing your financial plan regularly. Make it a part of your life, just like your annual health check-up.
Thank you for being such engaged participants over the past 30 days. I hope you carry forward these lessons, and I wish you all the best on your journey toward financial wellness.
Remember, the journey of a thousand miles begins with a single step, and you’ve taken that step here. So, keep going, keep growing, and keep planning!
Thank you.