Dependers, Spenders, Accumulators & Preservers; who are they?

DEPENDENTS - Children are the joys in life and we are the key to their future. Helping them achieve their dreams by planning for their financial future. This is a very important and early Life Stage. It is an opportunity to provide security and peace of mind for those who are so near and dear to you and depend on you. If you have young dependants, you may want to start saving for their university education as early as possible. You may also want to be well protected should something unexpected happen to you, such as a serious illness, disability, accident or even premature death. Why? Because with adequate coverage, you can ensure that your loved ones can afford to go on living in the family home and maintain their standard of living, and that your children’s education is assured.


SPENDERS or Savers? You may be young and single, starting out on your career or enjoying married life before children come along. Fulfill your aspirations by planning for your financial future. You may want to provide adequate protection, especially if you have just got a place of your own. With the financial commitment of a housing loan, as well as other debts, you will want to consider whether you or your family can pay off the outstanding loan should something unexpected happen. Also, this is a good life stage to begin developing skills in the areas of saving and investment. Why now? Because this is the stage in life where you begin to think about a plan to help you fulfill the goals you want to achieve as you grow financially.


ACCUMULATORS - You have worked hard to make adequate provision for yourself and your family. Your career is advancing ... are you also advancing financially? Now you can think about saving and investing for the future — and it pays to start early. Probably, your children may have grown-up, so you can stop worrying about providing for them and start planning for improving your own lifestyle. This is the life stage where you start to think about saving and investing wisely to maximize your potential returns. You may be in a position to save and invest even more. Why? Because your financial commitments may be lessened if you have paid off your housing and car loans. Now, maybe your need for life protection will be less, although you may still want to ensure adequate protection for your health.


PRESERVERS - You want to enjoy your retirement and health is important. In addition, you would like to leave a legacy for your loved ones. Enjoy your golden years by planning for your financial future. After a lifetime of hard work, you deserve to have a comfortable retirement. In order to maintain your standard of living during your retirement years, you may want to invest in an annuity plan or income investment portfolio which will give you a regular monthly income for life. With rising medical costs, you should also ensure your medical and long term needs are well protected. Another important need you may have at this life stage is preserving your hard earned wealth for your loved ones and arranging funding for your estate planning needs.

Financial well being for everyone

Financial Well-being for Everyone

Throughout our life, we have to make many financial decisions, such as:

• I want to have my own property
• I hope to upgrade to a bigger flat or apartment in 5 years…
• I want to buy a family car…
• I want to take my family on a holiday every year…
• I wish to provide my kids with an overseas university education…

However, we often make financial decisions in a haphazard manner. We tend to have no overall direction or lose the determination to enforce our decisions. Eventually, we do not achieve our intended goals or take a longer time to achieve them. And because we are so caught up with our immediate financial concerns during the most productive period of our lives, we fail to accumulate a sizeable nest egg for a comfortable lifestyle when we retire.

What is Financial Planning?

Financial Planning is the process of meeting your life goals through the proper management of your finances. It is a process that consists of specific steps that help you ascertain your financial condition objectively. The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan how you can meet your current situation and future plans. Eventually, financial planning should provide direction and meaning to all your financial decisions.

By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can therefore adapt more easily to life changes and feel more secure that your goals are on track.

Take Charge and Plan Early

With financial planning, achieving your short-term ad long-term financial goals will become possible. Of course, the success of your financial plan depends on how realistic your goals are, how early you start, how much time you have to achieve those goals and how conscientious you are in following the plan.

How to make Financial Planning work for you

Financial planning will work well to help you achieve your desired goals, if you keep in mind some basic principles:

• Set measurable financial goals
• Understand the effects of each financial decision
• Re-evaluate your financial situation periodically
• Start planning as soon as you can
• Be realistic in your expectations
• Realise that you are in charge
• Know what to expect from a qualified financial planner
  

Some Common Mistakes with regard to Financial Planning
(Source: Certified Financial Planner Board of Standards)

• Do not have measurable financial goals.
• Make financial decisions without understanding their effects on other financial issues.
• Neglect to re-evaluate their plan periodically.
• Look for a quick financial fix instead of a long-term strategy.
• Expect unrealistic returns on investments.
• Think that financial planning is only necessary when they get older.
• Think that financial planning is only for the wealthy.
• Confuse financial planning is primarily tax planning.
• Wait until a money crisis occurs to begin financial planning.
• Think that using a financial planner means losing control.

Who Can Help?

As the years go by and our plan grows in complexity, we may well be calling upon a whole series of experts to help us. Included in this group may be an accountant, lawyer, a trust and investment officer of a bank, stockbroker and real estate expert. However, for most of us, the first person who can help us is a professional insurance adviser who specialises in Financial Need Analysis (FNA).
Such a person can help us to take the four steps necessary to achieve financial success:

1. Set financial goals
2. Prioritise them
3. Initiate a plan of action
4. Review and update the plan regularly

Last but not least...

There you have it - the basic of Financial Planning. Financial planning needs your investment of time in undergoing all those steps mentioned above. It is part and parcel of developing an effective plan for you to achieve your financial goals may be.
Basically, a sound financial plan is able to handle the following 3 events like:

1. We might live too long;
   
2. We might contract a serious illness or prolong injury;
   
3. Or we die too soon.
   

So start planning now to avoid any disappointment because nobody has planed to fail, but most has failed to plan.

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