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“You only live once” - The best way to plan your finances for life

by , 21 December 2015

I often hear people say, “Just do it, you only live once.” I cringe when I hear this…

You: “I really want that new S-class Mercedes Benz but I don't think I can afford it.”
Friend: “Go for it, you only live once.”

Yes, do it! You'll end up paying for that S-class for the rest of your life. You'll live hand to mouth while the car depreciates in value and you and your family are forced to live a less fulfilling lifestyle.


Many people think throwing caution to the wind is admirable. But, since you only live once, don't you think you need to be more responsible with the life you have? 
 
The fact that you only live once is exactly the reason why you should take more calculated risks. Your brash decisions could have a long-term impact on your family, friends and most importantly… YOU! 
 
Acting impulsively when it comes to finance only makes you a slave to the man. Spending the rest of your life working to pay off things you never really needed to buy in the first place.
 
So when, you're tempted to buy something ask yourself, “Is that going to change my life for the better? Or am I going to spend the rest of my life working to pay it off?”

Take care of yourself and your finances – After all, you only live once!

It doesn’t matter if you’re single or if you’re responsible for a family of four. If you don’t take your health and your finances seriously, you’ll find yourself in a financial rut – forever! If you neglect your body, the cost of medical care could leave you broke. If you spend frivolously, your spending could leave you broke.

Now, I know what you’re thinking, “There’s more to life than money.” 

And, of course, you’re 100% correct. That’s even more reason why you need to plan your finances so carefully, so that you don’t spend all your time burning the candle at both ends just to pay your bills. The benefits of prioritising your cash isn’t only about having money in your bank account. It’s about spending your limited time on earth in a more personally fulfilling way.

You’ll have more time to spend with the people you love, doing the things you love and living the life you’ve always wanted.

The best way to plan your finances for life 

Make no mistake – Setting a life-long financial plan is a challenging exercise but if you get it right the first time, you won’t have to spend every waking moment of every day focused on your money. Of course, you want to start early when you’re in your twenties, but what if you’re thirty, forty or even fifty?

The good news is, I’ve found a way to help you plan for your financial future no matter how old you are. All you need to do in understand the responsibilities you’ll have at different stages in your life.

I’ve broken down the most common ones below, but I know that you have specific dreams and responsibilities so, you need to tailor this list to meet your specific situation.

The foundation of your life-long financial plan

In your 20s – You’re new to everything

On average, most people start working in their 20s. At this point in your life, you should already have a growing savings account. If you don’t – start saving now. This is the perfect time to practice discipline with your money.

Right now, you’re building your career and probably thinking about marriage and family. Some of the things you should have as focus points in your financial plan include:
  • Paying off your student loans if you have any
  • Buying reliable transport
  • Finding your first home
  • Saving up for lobola
  • Wedding expenses
  • Family expenses (having children) 
  • Basic healthcare
  • Short- and long-term life insurance
Like I said, these are the most common things you need to consider. If you have different goals, then this is the time to list your goals and implement a plan to help you achieve them.

In your 30s – Your responsibilities increase

By the time you reach thirty, your parents will be nearing or in retirement. Chances are, you’ll have to help them where you can. If you got married in your twenties, you probably have children to take care of too. At this point in your life, you need to consider the following financial planning goals:
  • Save for your children’s education
  • Put money aside to help you ageing parents
  • Save for your own retirement
  • Get a better medical aid for your family
  • Get full life cover – dread disease, disability and an income protection plan
  • Draft your last will and testament
Remember, these are your long-term financial goals. Failing to plan for one of these issues can leave you financially crippled. Do you see why starting early is so important?

In your 40s – You’re getting older. It’s time to consolidate 

If you’ve planned well for everything so far, this is the time to take stock of all your financial obligations. You’ve been working for 20 years and you’re almost half way to retirement. You also need to put measures in place to protect the lifestyle you’re living right now! Here are some of the most important issues you’ll probably need to address:
  • Get funeral plans for your oldest living relatives
  • Put extra money away for your medical care during retirement
  • Get rid of all your debts as soon as possible
  • Make sure that you’ll have enough for your retirement
  • Pay off your home loan and cars
  • Increase your insurance cover for you and your family
Expect to attend many expensive funerals that you need to contribute to

In your 50s – You’re on the home stretch

By the time you’re 50, you need to implement the final stages for your retirement planning. You certainly don’t want to be a burden on your family when you stop working. You also don’t want to have to continue working because you can’t maintain your lifestyle. So, when you reach 50, you should be looking at the following:
  • Eliminate all your debt
  • Get the proper health insurance for your age bracket
  • Help your children find their feet financially (you don’t want to support them when you retire)
  • Review all your life policies, your wills and trusts
  • Have an exit strategy for when you last day of work arrives
  • Top up your retirement savings as much as you can
In your 60s to eternity – Enjoy your life but manage your money closely 

You’re now ready to retire. Your bank account is looking healthy but your body is getting tired. You’ll find that you’ll spend more time at the doctor sorting out age related illnesses like diabetes or arthritis. These expenses could put you back quite a bit, even if you’ve planned for it. So, at this stage of your life you need to focus on the following financial issues:
  • Manage your money closely so that you know exactly how much you can spend
  • Spend more time with your children and grandchildren
  • Start ticking off items from your bucket list (Do the things you’ve always wanted)
  • Start a hobby to keep yourself occupied
  • Review your last will and testament at least once a year
  • Find a trusted financial planner that can help you make the right decisions
I hope now you realise how important financial planning is to your life. You only live once, so you owe it to you and your family to make the right, responsible decisions so that you don’t become the financial burden nobody wants to carry.

Fortunately at FSPInvest.co.za, we have financial planning products that can help you no matter what stage of life you’re in… or, if you find yourself struggling to make the right decisions, ask your personal finance questions on moneyclub.co.za and get a guaranteed answer. 

Let’s build your wealth together,

aidensig.png 
Aiden Sookdin
Editorial Director
MoneyClub.co.za
The South African Investor
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Author
The Home Business Tycoon
The Minimum Wage Millionaire



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“You only live once” - The best way to plan your finances for life
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