Reviewing Your Finances - Investing 101 | AHAM Asset Management Berhad

So you have successfully begun your investment journey, good on you and welcome to the club! Now that you’ve taken your first step towards better managing your wealth and finances, it is time to move on to the next part – reviewing your finances and portfolio.

Similar to regular medical checkups, it is important to review your investments and finances from time to time to ensure that they’re in a healthy condition. Some do it annually, while others prefer to do it on a semi-annual or quarterly basis even. It’s fine to perform these reviews at your own pace, but when you do, here are some questions you may want to ask yourself.

Question 1: Am I on track with my financial goals?
A financial review should be an ongoing process – it’s not just a one-time thing! So, if you haven’t looked at your goals for awhile now, it’s time to revisit them.

Make sure you’re on track with your savings goals, emergency and rainy-day funding, and see if anything has changed in your life since then. If it has, make the necessary adjustments.

It can be especially useful to go through this exercise if nothing has changed – it’s a good way to make sure that your plans stay on track and continue working for you to map out a better course for the next six months of the year.

Question 2: What’s going on with my investment portfolio?
Just like your financial review, checking your investments periodically allows you to keep your portfolio aligned with your risk tolerance, time frame for investing, and financial situation.

Start by assessing your investment portfolio to see if it still matches your needs. If your portfolio is no longer aligned with your goals, consider making a change. These changes can include minimising your risk; diversifying your exposure to different geographical markets; or gradually increasing your monthly investment contributions.

The aim is to ensure you are a step closer to your investment goals.

Question 3: Is my current insurance coverage sufficient?
It may also be wise to check your insurance policies and make sure they still meet both your current needs and long-term goals.

If your family is growing, you might want to increase the amount of your insurance coverage to protect your loved ones. If you have children under 18, it's important to check if they are still covered under your health and disability insurance policies.

Consider taking on a pet insurance if you have adopted a tiny being. It may seem like an unnecessary expense, but in the event, something happens, having pet insurance can be the difference between being able to afford expensive medical care and having to put your pet to sleep.

Question 4: How have I managed my spending?
Did you overspend your allowed spending budget on multiple occasions and dipped into your savings? Did you overcommit to any new recurring monthly bills? If you’ve answered yes, it’s time to get you back on track.

Look back at all your expenses from the past 6 months, so you can see where your money is going each month and highlight the unnecessary spendings you’ve made – like that impulse purchase at the grocery store.

Then look at your monthly budget and see if you could better allocate your allowed spending budget to ensure you don’t overstep your expenses while factoring in a buffer for your impulsive purchases or new recurring bills.

It’s important to stay within your budget and refer to it as a guide when making a financial decision.

Question 5: Did I tackle my debts better?
Begin by making a list of all your debts and their total amounts owed. You can do this on a spreadsheet or in a notebook – whatever works best for you! This list will help you see the whole picture of what you owe and how long it will take for each debt to be paid off.

Did you pay your debts on time? Set a calendar time to pay off your monthly payments so that you are never behind on your payments.

It's important to periodically revisit this list and update every few months as the total amount of your debts changes.

Disclaimer

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