HSBC: Managing Your Finances Better In 2016
[Advice column by HSBC Bermuda]
It’s a new year, and I want to tighten up my finances. I am paying on my car loan, my child’s tuition and covering other expenses. But in the long term, I want to buy a house and hopefully retire early. How do I meet my current financial obligations and stay on track to meeting my long term goals?
It’s great that you want to start the year off getting your finances in order. With a bit of careful planning and the right advice, you can get your finances in good shape and be closer to achieving your goals. HSBC has experts on hand to provide free financial planning advice*, however here is some information for you to start with.
Sort out your financial priorities
List upcoming major life events or financial commitments, how much money you’ll need and the amount of time you have to meet this goal. For example, are you paying tuition for the next four years, making loan payments for the next three years, buying a house in nine years and retiring in 15 years? This will give you a clear understanding of your short term and long term goals.
Benchmark yourself
Now that your priorities are set you should evaluate your current financial status. Are you on track to meet your goals? A good rule of thumb is that the total contributions into your savings should be equivalent to a percentage of earnings, equal to half your age. For example, if you are 32 years old, you should pay 16% of your earnings into your savings. If you are not on track, what can you change in your spending habits?
Develop and implement a comprehensive financial plan
Whether you are on track or not, developing a plan is key to achieving your goal. Putting the plan into action may be easier than you think. Cutting down on spending and saving more each month, can make a big difference in the long run.
Review your financial plan annually
Having made a plan that meets your needs, the chances are that those needs will change with each life event [emergencies, weddings etc]. You should see these events as important triggers to review your plan and make any necessary changes.
Free Financial Planning with HSBC
If you are intimidated to develop your own financial plan, HSBC can help! Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and your financial ambitions. From there, we provide you with solutions on how to manage, grow and protect your savings to achieve your goals.
To make a free Financial Planning appointment visit www.hsbc.bm/planning or by calling 299-5959.
Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority.
