Review of Financial Plans
Changing your financial plan too often will be as bad as not having a financial plan. Then again, there is no ideal fixed period after which reviewing a plan can be recommended. It is up to you to decide how often to review the plan – every six months, every year, every two years, or every five years.
Step One
Analysis
The factors that will guide you regarding how often you should review your plan are
Financial products
The type of financial products that you have invested in. If products are maturing at short intervals, you may have to review your plan more often.
Goals
The types of goals that you have set. If you have many short-term goals, as each goal is achieved, you need to review your financial plan.
Personal factors
If the number of your dependents increases or decreases, you need to review your plan. If your income increases or decreases, you must check your financial plan…and so on.
Step Two
Strategy
Reviewing your financial plan involves
⦿ Decide if all the goals you have set are still relevant – have you lost interest in achieving any of them; would you like to add some new goals?
⦿ Decide if the time frames you set for the goals are still the same as you had previously decided . Will your child still get married at around 25, as you had planned, or does it look like she may marry earlier or later?
⦿ Are the financial instruments you chose to meet your goals going as planned? It is more the case for unpredictable investments like shares or equity mutual funds. In the case of fixed-income investments, you know for how long you are investing and what you will get. But in the case of shares, you may have expected them to do well, and they don’t, or they may outperform your expectations. It would be best if you saw how these instruments are functioning as per your expectations.
Step Three
Implement & Review
For more information about our modular financial planning services, please get in touch with us.
