6 steps to get your finances in shape
You might be familiar with the term ‘financial fitness’, which is used to draw similarities between your financial plan and a physical fitness regime. This analogy is as apt as ever because economic uncertainty around the world can easily distract you from your grand financial plan.
The main reason the analogy works is because financial wellness demands that you remain committed to a process if you hope to reach your long-term goals.
In the same way that personal fitness contributes to your physical well-being, financial fitness benefits your financial health. This has become a more pressing priority in the face of economic and geo-political uncertainties.
One important similarity between physical and financial wellness is that only you have the power to make the change that you wish to see. No-one can force you to exercise or save regularly. Only you can determine whether you’re going to stick with the exercise programme or choose a sedentary lifestyle that will surely impact your health.
Here’s how you can take control and strengthen your financial well-being.
Assess your financial fitness
Start by getting a clear picture of your current financial health, just as you would with a physical fitness assessment.
In the same way that you’d ask a personal trainer for expert advice, it pays to work with a financial planner or wealth manager. They can help you to get an objective view of your current financial position by reviewing your plan and calculating how likely you are to meet your goals.
A financial planner can help you identify your financial strengths and weaknesses by assessing your finances and how each component impacts your overall financial health. Your goal when engaging with a financial advisor is to create a clear, actionable plan that will move from your current state to your desired financial state.
Diversify your financial workout
Diversification is like a balanced workout routine for your investment portfolio. Just as you wouldn’t rely on a single exercise to stay fit, you shouldn’t depend on a single type of investment.
By spreading your investments across different asset classes, you may reduce the impact if any single asset underperforms.
An offshore investment may facilitate your diversification strategy because of the added benefit of shielding you from local currency risks and market fluctuations.
Practical step: Unsure where to start? Consider consulting a financial advisor to help you craft a diversified investment strategy that matches your risk tolerance and financial goals.
Set and adjust financial goals
Setting clear, measurable financial goals is like setting fitness targets. Whether you’re saving for retirement, funding your children’s education, or buying a property, having realistic and achievable goals keeps you focused and motivated.
It helps to outline the steps you need to take to reach these goals, and then create a timeline. As you would with an exercise programme, it’s best to stay flexible and adjust your goals based on changes in your personal circumstances and the economic environment.
Fortify your financial performance
Sometimes it makes sense to bolster your financial performance by choosing solutions that are more stable. Continuing the personal fitness analogy, think of these more predictable assets as the supplements you would take to boost your physical performance.
Financial products that perform this stabilising role generally fall into the realm of fixed-term deposits and Structured Deposit Products . One of the biggest benefits is that you’ll have greater certainty of what the outcome will be once your deposit period has expired.
However, the ultimate benefit is that they help you to ride out economic volatility by offering you a defined outcome before you even make your deposit.
Stay proactive with regular reviews
Your financial plan deserves more attention than simply setting your goals and hoping you’re on the right track. In the same way you would monitor your physical well-being, it pays to regularly review your financial performance.
Doing so helps you to stay on track with your goals and gives you the room to adapt your plan if the economic environment changes. It’s suggested that you conduct these reviews annually or after significant life events like marriage or divorce, the birth of a child, or a career change.
Once again, professional advice can go a long way to removing the guesswork from this decision-making process.
Take action now
Lastly, getting fit demands effort, dedication, and smart strategies.
Despite the current economic uncertainty, you have the power to shape your financial future. As we’ve shown, getting into shape is a matter of commitment and keeping your eye on the end prize.
Doing so becomes easier if you begin to equate your financial plan to a fitness programme. You can’t expect overnight results, but the end goal is always getting nearer as long as you remain disciplined.
You can start implementing these strategies today by exploring our latest Structured Deposit Products to see how they can support your long-term goals. View our latest offerings on our website.