Get organised to avoid financial headache

People can broadly be sorted into two categories: those who are financially organised and those who aren't.

People can broadly be sorted into two categories: those who are financially organised and those who aren't.

The organised people could probably give you details about their expenses, and off the top of their heads how much they have in pension plans and savings.

Those who are financially disorganised would probably have difficulty telling you even how much they spend on groceries a week and will more likely look baffled if you ask them about their pension or insurance.

Whatever category you fall into, creating a financial plan and writing all the details down is the best way to take control of your finances.

Your bills and chequebook balance are not the only factors you should consider. Keeping up to date requires familiarity with things such as your savings and retirement plans, insurance, tax, estate plans and investment-management programmes.

Your financial plan can be organised once you understand your present and future economic needs. So write down what it costs you to live today, and project that forward to what you would need for your retirement, building in provision for inflation.

Planning ahead is essential, lest things do not go as well as you expected.

Always have a backup plan for big, unexpected expenses, such as a wedding or a funeral.

A few expenses such as a new car or a house renovation can sometimes be squeezed into the budget, but having a separate contingency fund is more sensible.

A financial plan consists of more than just savings and investments. Know how much your family would need if you die early or are disabled, and make sure you have enough insurance.

Ask yourself about your income when you retire. Consider your company pension and retirement annuities - whether you and your family will be able to live comfortably with what you have provided.

Will your spouse be able to manage financially if you die soon after retirement?

Take care of your long-term welfare. How would you take care of yourself if you fall ill in your old age?

Would you like to live in a nursing home or have your children take care of you?

Consider your financial plan a long-term investment. Putting things in order and getting ready for the future by budgeting well, increasing investment returns, having adequate insurance, and re-allocating current assets is the key for you to achieve your financial goal.

l Bryan Hirsch is the chief executive of Pioneer Financial Planning. Visit or e-mail for more information.