Ask Leo: How often does a financial plan needs to be reviewed and why?

over 1 year ago

Financial plans are the ones that help us and guide us on how to succeed. When you make plans about things, executing them will be easier and orderly when you have a plan compared to when you don't have one.

But before I go deep into the topic, let me explain what a financial plan is. These are the documented financial goals we make for ourselves and steps on how to achieve them. It simply states the things you wish to achieve in life, the time you want to achieve them and how you plan on achieving them.

As we all know that life is unpredictable and certain things do happen that will need for us to review out financial plans. This could be a sudden death of someone close and who can influence our plans, the birth of a child, change of location, lose of job, accidents and many more. These sudden changes will definitely influence one's life and ofcus our finances. When these things happens a review is necessary. Also we need to know that with or without these changes, a review is also needed and important and normally once a year is advised. Left to me I will even say that's very long. Once a month is preferable because you get to recount your steps and see how close or far you are to these goals. This in turn motivestes you.

Reviewing our financial plans simply mean looking at these goals and choosing the ones that are still important and achivable while removing the ones that are not. New goals can also be added to our plans and new strategies on how to achive these goals. It is also very important to review the time frame placed to achieving these goals and seeing if its still achievable. If not, a new time frame is set. Finally, it's important to review our investments and see how much we've accumulated. If its still profitable, we leave it. If not, we pull out our investment and reinvest in a more profitable one.

There are other ways of reviewing our financial plans but I will be talking about these ones for now. In conclusion, it's very important to review our plans because it makes us see that our daily work are not in vain and it points us to where we need improvements.