Time to review your financial resolutions

Ester Ochse, Channel Head at FNB Financial Advisory.

The steep increase in the cost of living should prompt consumers to review their financial resolutions. In the first quarter on this year, consumers had to deal with back-to-back interest rates increases, which were quickly followed by electricity and fuels price hikes.

To add to the financial pressure, food prices are expected to continue rising for the remainder of this year and further rate hikes have not been ruled out. 

Channel Head at FNB Financial Advisory, Ester Ochse says the sharp increase in the cost of living is likely to have caught many people by surprise. She says people who had set financial resolutions before the beginning of this year should reassess their financial position and adjust to the current conditions.

“At the moment, there’s no indication that consumers will get financial reprieve any time soon.  In fact, most financial indicators point to an even tougher outlook. 

“People need to be realistic about the financial resolutions they can achieve during the course of this year. For instance, if you were looking to buy a new car using a linked interest rate, consider the fact that your instalments could go up once or twice before year end, and adjust your plans accordingly.” 

Ochse provides important things to consider when reviewing your financial resolutions for this year: 

•          Separate ‘needs’ from ‘wants’ in your resolutions;
•          Isolate short-term from long-term resolutions;
•          Match your needs to available financial resources;
•          Set a timeline to achieve each resolution;
•          Keep track of your progress. 

“It’s important to remember that reaching financial resolutions requires a lot of discipline. Once you’ve set yourself targets, try to avoid impulsive decisions that could delay the realisation of your resolutions. People need to be willing to sacrifice and compromise along the way,” she says.