If you’ve decided that 2018 is the time to get your finances under control, try this month-by-month plan so that your finances and admin are all up-to-date by the end of the year.
January: Update your budget and plan for expenses
Write up a budget. Don’t just guess what you spend; pull out your bank statements and keep track of your day-to-day spending so you get a handle on where your money is actually going.
Plan for major expenses such as school tours, a major car service or holidays. There may be life events you need to plan for like a wedding or the birth of a child.
You can start saving towards these by opening a savings account linked to your transactional account so it is easy just to transfer the money across each month.
February: Sort out your taxes
28 February marks the end of the tax year so it is a good time to make sure you are optimising your tax deductions. You can top up your retirement annuity and contribute to a tax-free savings account.
Make a note of your car mileage at the end of February if you use your car for business travel. Find out what expenses you need to keep track of and start getting your supporting documents in order for your tax return.
March: Review your insurance
Find out if you are insured for the correct values on your car and household insurance. Shop around and compare quotations from other insurers but make sure that you know what cover each insurer offers for the premiums you pay. You may find that one insurer offers you cheaper premiums but will charge you a much higher excess when you make a claim. This can save you money each month but make sure you have the excess tucked away in an emergency account.
You also need to review your life assurance needs if you have had a child, married, changed jobs, been retrenched or received a raise.
April: Review your will
If you don’t have a will, rectify that now! If you do have one, check if it needs updating. Any life changes such as a marriage, divorce or children will require you to update your will.
May: Review your budget and create a debt repayment plan
Now is a good time to review the budget you set at the beginning of the year. Are you on track or overspending? Review what changes you need to make and see if there are areas of overspending you can cut back to give you a little extra cash. If you have short-term debt, use this money to create a debt repayment plan to accelerate those payments and settle your debts sooner.
June: Medical check
Check how much money is still available in your day-to-day savings account and plan your regular doctor visits such as dental and optometrist check-ups. If you have a self-funding gap, find out from your medical aid how much you will need to spend before you get past the threshold so that your medical aid will cover your costs.
July: Focus on savings during savings month
Sometimes the hardest part of saving is opening the account! If you do not have a tax-free savings account, commit to opening one now. Alternatively sign up for a bank account or app that creates automatic savings.
Review the fees on your different savings investments. Check that fees are not costing you more than they should by comparing different investment vehicles. Also make sure your investment meets your needs. If your long-term savings are sitting in cash, you need to look at higher-growth investment options.
August: Women take control
Far too many women leave all of the financial decisions to their husband. It is important for both partners in a relationship to be fully aware of their finances, and to talk openly about money issues. Get your own financial adviser.
September: Spring clean
Clean your clutter and get your admin filed and sorted. Draw up a list of all your policies, accounts and investments so they are easily available in one place.
Also make a note when important documents are due for renewal, like your driver’s license and passport. You’ll save money by renewing these in time, thus avoiding penalty fees for late renewal.
October: Review your medical scheme
Medical scheme increases are released this month. Find out what the increase will be for your particular benefit option and then assess whether you want to change options or even medical schemes in the year ahead. Compare your medical needs with the benefits you can receive and the premium you are expected to pay for those benefits.
November: Don’t blow the windfall
This is the time to plan how you are going to spend your December bonus or tax refund – before you get it. You could make a lump-sum payment into your home loan so that you can pay it off sooner rather than later, and save interest. Or you could put your bonus towards annual costs such as school fees, a major car service or home renovations. Whatever you do, make sure you have a plan so that you don’t blow the money in a frenzy of spending.
December: Be prepared
Don’t forget that you still have to pay debit orders in December and account for them before you spend any money. Remember it is a long way to your January paycheque and after all the parties are over and the visitors have left, you still need to buy groceries and pay for electricity among other regular costs.
This article first appeared in City Press