10 Easy Goals To Fix Your Finances In January
Happy New Year! So, here we are in 2021. 2020 is finally over and you have been thinking about your personal goals for the next 12 months.
Whether you’ve been in Dubai 1 year or 10 it is a useful time to take stock of your progress towards your long term targets. So what should be on your checklist?
All the end of year festivities are expensive, so now is a good time to check your emergency fund. Make sure that there is enough to cover 3-6 months of your expenses.
If you have moved home you should make sure that all of the companies with whom you hold financial products are aware of your new address. Life assurance companies hold millions that have been unclaimed, don’t let your money be added to their coffers.
If You Changed Your Job
If you have changed jobs, congratulations on the new post. Few people move jobs for less money but you should check the level of employee benefits. Life assurance, pensions and medical insurance are valuable additions to your financial fitness, make sure you are no worse off in your new job.
Many people I speak to do not have a detailed knowledge of their employee benefits. I would recommend checking what they are if you are in any doubt or don’t have them in a formal contract.
It is also important to check you have the correct person or people nominated for any death in service (life assurance) benefits.
If You Did Not Change Your Job
If you have not changed jobs then you need to make sure that your financial planning remains on track with your ‘personal inflation rate.’ This is different from the rate of inflation in the general economy. It accounts for any change in your income and expenses. Savings plans and pensions contributions should be increased in line with your personal inflation rate on an annual basis. They will then maintain a purchasing power relevant to you.
If You Changed Your Marital Situation
If your marital situation has changed, whether it is beginning or ending a relationship, your financial responsibilities will be affected. You need to consider the change demands on your personal financial circumstances.
The Arrival of a Baby
If you have a new baby, congratulations on the new arrival. I don’t need to tell you that this changes every aspect of your life not just your financial responsibilities. You should make sure that your baby is adequately provided for whether you are there to see him or her grow up (school/university fees etc.) or not (life assurance or other major assets to cope with the costs of bringing them up.)
Planning or Updating Your Will
If you don’t have a Will set a date and get one written it is an essential legal document for all expats but particularly important for those with young children. See our sister site Great British Wills for more information.
The beginning of the year is also a good time to re-read your Will and make sure that this vital legal document is up to date.
Review Temporary Guardians
In 2020, many people sadly lost their jobs and left the UAE. This may mean that the person who agreed to be the temporary guardian of your children is no longer in the country. If this is the case, you should amend your temporary guardianship arrangement.
Review of Financial Planning Goals
When you start financial planning, you will have a goal or goals you want to achieve. To be effective, these goals must have a timescale by which they are to be achieved. Many life goals take years to achieve such as buying a home or building an investment portfolio of sufficient size that you can live off of the income.
Track your progress towards your goal at least once a year. This enables you to make small changes as you progress towards your goal rather than a big change later on in life.
The Financial Services sector is dynamic. Innovation and competition are strong forces which demand continuous evolution from those who wish to remain successful in meeting their clients’ needs. This has seen prices driven down and transparency increased over the last 2 decades. With new products and services being launched on a regular basis, it makes sense to make sure your money is invested in the most efficient way possible.
If you have any thoughts, comments or questions please contact me. Wishing you a Happy and Prosperous 2021!