The most common usage of spring cleaning refers to the yearly act of cleaning a house from top to bottom which would take place in the first warm days of the year typically in spring, hence the name. However it has also come to be synonymous with any kind of heavy duty cleaning or organizing enterprise. A person who gets their affairs in order before an audit or inspection could be said to be doing some spring cleaning. We have extended this explanation even further to include the “spring cleaning of one’s personal finances”.
The following points can be regarded as our personal finance compliance check list:
1. Is your Will up to date.
Even if you are single with no dependents it is important to have a valid will. Make sure you still have an original copy of the will and that you’re satisfied that the beneficiaries, trustees and executors are still relevant.
Have you ever considered writing an Ethical will which is essentially a letter to your loves ones which you file away with your will?
What about a Living Will?
2. Life Insurance
Most South Africans are significantly under insured for life cover, capital disability cover and income protection. A fortunate few may have too much life cover as result of your growth in personal assets. They have the option of reducing their cover and investing the monthly saving back into their investments. Speak to your financial planner and have him or her evaluate your risk cover requirements.
3. Short Term Insurance
Does that bicycle hanging up in the garage full of cob webs still need to be covered? Get a second or third quote from competitors to see if you’re not paying too much for your cover. Make sure you fully understand the exclusions and excesses.
4. Medical Aid
Do you and your family anticipate any significant increases in your medical expenditure e.g. braces for your kids teeth? If so, you may wish to start investigating moving onto a different medical aid plan to make sure that you and your family are adequately covered.
5. Credit Check
Often quite by mistake you forget to pay the R10 balance on your Edgars account and next thing you’re black listed without your knowledge. Having a good credit record is essential in todays’ monetary
environment where your credit score is used every time you wish to purchase a house, buy a car, open a clothing account or getting a cell phone contract. You’re entitled to a free credit check every year so make sure that you get your latest credit score and confirm that you have not been black listed because of some small account you forgot to pay.
6. Budgeting
Analyze your spending for the past year and identify where you went wrong and what you can do to improve your spending habits so that you money available for the silly season which is just around the corner.
7. Banking
Go through your bank and credit card statements and consider your banking costs and the interest you’re paying on credit. Then find a way to negotiate better terms and rates with your bank.
8. Filing
Make sure that you file all your important documents and that they are easily accessible and tell your spouse or loved one where the documents are so should the inevitable happen they don’t have more stress place upon them in trying to find your will and information on your life insurance etc.
Try to use spring cleaning season to focus on more than just your house and get your financial house in order as well. It may be tough to find the time to do all of this but the benefits are well worth it. Not only will you sleep easy knowing that you and your family are taken care of financially but you have also saved some money and as result you’ll have some extra cash to spoil yourself or your family.
Colin Long CFP ®
Executive Financial Planner
Post Grad Dip Fin Plan.
Consolidated Financial Planning KZN (PTY) LTD
An authorised financial services provider
FSP License Number 12978
*** Consolidated is a national financial planning practice with offices in Western Cape, Johannesburg, Tshwane, Eastern Cape and KwaZulu-Natal. Colin Long CFP (R) is based in KwaZulu-Natal
