Taking your financial pulse

“With financial institutions adhering to such stringent lending criteria, it is becoming ever important for home buyers to show affordability and keep their financial affairs in order. This applies both to those looking to purchase property in future as well as those who currently own property and may want to take out additional finance for renovations or upgrades. An annual review will give consumers the opportunity to examine their financial planning action steps and measure the progress they are making towards attaining their financial goals,” says Goslett.

During the annual review, Goslett suggests revisiting the building blocks of the financial plan and reviewing resources, goals and priorities. According to Goslett, this is also an excellent time to incorporate any major life changes into the financial plan that may have occurred over the past year such as a marriage, birth of a child, a death, or a new business. These elements will have an impact on how financial needs and planning may need to be adjusted.

“A major life change will more than likely change a homebuyer’s need or short-term goals, especially if their family is growing and the property they are living in no longer meets their requirements. They may need to purchase a home sooner rather than later, which would mean that more money would need to be set aside for the 10% to 20% deposit required by the banks. A professional financial planner could recommend strategies for time-sensitive objectives,” says Goslett.

He notes that as part of their financial plan, consumers should consult with a tax professional to explore how life changes could also affect their tax status. “Homebuyers should make sure that they are prepared each year for their annual tax return by getting receipts in order. This way they will be able to document their spending on tax deductable items. Keeping things in order will also help to ensure that they are getting the most for their money on expenses such as insurance, flexible spending accounts, cell phone plans and even investment fees,” says Goslett.

An important element of any financial plan, especially when wanting to show affordability to banks to assist in getting home loan finance, is to pay off existing debt as fast as possible wherever possible. “Even R100 more a month than the required payment will make steady progress towards eliminating the debt completely. Putting money aside can also help consumers to stay out of debt and at the same time build an emergency fund. For this, a set amount can be transferred into a savings account each month,” says Goslett.

He adds that the act of monitoring and benchmarking is beneficial. “Consumers should measure the performance of their investment portfolio as part of the annual review. Typically, performance should be measured against several benchmarks, but the most important of which is the consumers own benchmark. For instance, if they had established that the portfolio should grow by a certain percentage each year, the portfolio’s performance should be measured against that yardstick,” says Goslett.

He concludes that, just like a medical checkup, taking your financial pulse is not something to put off.  “Tackle spending issues where possible and know where your money is going. If necessary, implement changes if your current financial plan is keeping you from getting to where you want to be.  Take the time to examine your financial and life goals in order to determine that the course you are on will attain these goals. Review changes that have occurred and anticipate changes that may occur in the future – because with the correct planning anything is possible.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us