Adjust financial plans to sail through harsh economic times

Posted  Sunday, June 1  2014 at  17:21

In Summary

• If you have not accomplished much by half year, it’s time to review your plans.

If June has reached and you are lagging behind in your financial goals, it’s time to adjust your spending. Photo/FILE 

By Isaiah OpiyoinShare

The month of June is here with us and the first half of the year is almost over. By now, you should be midway in your financial goals.

It has been a season of financial challenges with the cost of living going up. Many households have been thrown off their financial budget, putting many plans into a halt.

Worse off, with the new NSSF rates taking effect this month and amongst other financial challenges such as fluctuation in fuel prices, the next half of the year may not be better either.

Whether you have trailed your financial goals or surpassed them, you certainly need to review your plans to see how well you can improve on them and fine-tune them to reflect the changes in your life.

Starting from financial budgeting, you need to examine your monthly budget allocation to reflect the increased prices of household items caused by inflation.

Since inflation reduces one’s purchasing power, if the budget allocation is not reviewed it would reduce the amount of household items that one would purchase.

To review your budget plan, you can either increase the amount allocated for each expenditure or ration on other budget items to accrue some excess cash to channel to those items with increased prices.

For other budget items that sometimes undergo annual review of rates such as rents, make adjustment to reflect the same. If the rent rates have been reviewed upwards by your landlord or your property agent, make adjustment by either increasing your rent allocation or consider moving to an apartment of a relatively lower rent area.

With the prevailing fluctuation of fuel prices, review your transport allocation to avoid any future financial distress that would arise from increased fares.

In terms of insurance plans, you also need to review your premium rates and the size of your insurance cover that can sufficiently give you coverage as well as suit your pocket.

For instance, if you find the premium rates are slightly high above what you can afford, you can approach your insurance company and lower the size of your cover slightly to make the premiums affordable.

On the other hand, if you experience a change that requires an upward increase on the amount of insurance cover that you need such as a birth of a child or marriage, you can approach your financial advisor to help you determine what amount of insurance cover would be sufficient and the amount of premium that would pay.  

Next, if you find the frequency of premium payment not convenient to you due to either delay in salary payment or irregular nature of your income, you can also contact your insurer for a suitable premium frequency that would give you adequate time to organise your finances.

Sometimes, you could be provided with a group cover by your employer, if this is the case, you need to consider having a separate individual cover to protect your family from any financial loss that could result from any uncertainty that may knock on your door.

Not time to m