This year has certainly proved interesting so far. The global financial market certainly wasn’t the smoothest ride in the first half of the year, but as we head into the third quarter, it would probably be a good idea to review your personal financial plan and be ready for the challenges and opportunities ahead. While financial planning can more or less be an annual thing, doing a mid-point review in the middle of the year can be a good way to ensure that you are on track to hit your goals.
1. Take stock of your investment strategy
Investing has its fair share of risks and rewards. However, 2023 has certainly proved itself to be particularly volatile so far. As such it might be a good idea to take another look at your investment strategy. Generally speaking, a disciplined investment approach focused on reasonable and achievable long-term targets remains a strong strategy in today’s uncertain environment.
While reviewing your investment portfolio, ask yourself these questions:
- Are my savings and investments adequate? Should I readjust my account balances?
- Does it look like my current investments can hit their targets? Are there any opportunities to rebalance them?
- Are there any alternative investments that might be worth pursuing based on recent market activity?
Alternatively, you could also consider looking into opening a high-return fixed deposit or savings account to take advantage of decent interest rates.
2. Review and adjust retirement savings accordingly
In the most dire of situations, you might have to readjust your retirement plan due to not being able to meet your financial goals. Fortunately, 2023 has not been that bad so far. As such, you may want to consider even contributing a little more to your retirement fund to either increase your end goal, or reach said goal faster. You can do this by contributing a little extra to your personal retirement account or your EPF.
For more information on contributing more than the statutory rate, you can visit the KWSP website.
3. Meet and discuss with your financial advisor
Getting professional help is one way to ensure you have a solid plan to stick to. This is why meeting with your financial advisor at least once a year is important. However, a lot can happen in six months, let alone a year. Consider taking the time to meet with your advisor in the middle of the year to either review and adjust your plan, or affirm that you are on the right track. These collaborative discussions can help identify strategies to proactively manage any 2023 liabilities and help you to avoid any potential pitfalls in the latter half of the year.
4. Start planning out the holidays
It might be a little early, but starting to plan out your year-end holiday arrangements now can go a long way in helping you to reduce expenditure for the remainder of the year. Malaysia is a nation of many holidays and long weekends, but nothing can truly match the big vacation season at year end.
Not to mention, it will help you avoid running out of money come early December. Early planning can also help you develop a good holiday budget. Additionally, If you know what you plan to buy family and friends, and you have extra to spend, go ahead and purchase your gifts now so you don’t have to worry about it later.
Need help to get started? You can try using iMoney’s free checklist planner.
5. Go over your credit reports
Your credit report is not something you go over very often, but when you do, it provides you with a lot of useful information that can help with your financial planning. One thing it is especially helpful for is identifying whether you have been a victim of cybercrime. Your credit report can show you if there are any unfamiliar transactions under your name, which are a tell tale sign of identity theft. Reviewing your credit report and bank statements regularly may not prevent theft, but catching issues early may prevent more headaches in the long run. You can sign up with CTOS to get regular reports on your financial act
6. Restock your emergency fund
Your emergency fund is an incredibly important safety net for your finances. It is a backup reserve of cash you can dip into in the event of an emergency that requires immediate spending. Be it sudden, unforeseen charges, medical bills, debt or insurance payments, and more, an emergency fund ensures that you are not caught on the backfoot and prevents you from taking cash out of your savings or investment accounts.
A good rule of thumb is to keep approximately six months worth of salary as your emergency fund. As we head into the third quarter, this is a good time to review and restock your emergency fund if you were required to spend some of it. Also, consider your plans for the remainder of the year. Depending on what you might expect in the last two quarters, you may want to adjust the amount you keep in your emergency fund.
