Doing the bare minimum
Sometimes all that is needed to turn a chaotic personal financial plan into something that is usable, and even valuable to plan from, is a little bit of organisation. Some people love filing, they find it therapeutic. Not many of us are blessed/cursed with that gene, but sometimes they are onto something. To stop the task becoming overwhelming, do it in small bites. Start with the important bits first.
I developed by “RED FILE” approach with exactly this approach in mind. Often as I gathered information for a financial plan or estate plan I found clients battling to put their hands on important documents. Not only did this make it difficult for me to try and put a coherent plan together with them, it meant that if anything were to happen to the client – it would be almost impossible for another family member to take care of their finances. What medical aid plan are they on? Who is their short term insurance provider? Do they have life cover? Funeral cover? Where are the investments? Is there a bond on the house, and with whom? Where is the Will? The simple act of getting all the most important information into one file is 90% of the problem solved. All the other files can be delegated or outsourced – can’t it? If you hate it so much why not pay someone who loves that kind of thing to do it for you? You could even get them to come in once a quarter to file the rest of the bumpf you’ve accumulated. You can get your RED FILE divider template HERE
Once you’ve got everything in the red file, you and your advisor can start consolidating it and simplifying it. If it isn’t broken, there is no reason to fix it. But if it is ineffective, expensive or no longer ‘fit for purpose’ then at least you can have a strategy to sort it out. If everything is in one place, an annual review should be quick and painless.
Do this one thing now: Start your red file with a copy of the Will. That is a ten minute job. Buy a red A4 file, print out the dividers – even if you don’t have time to personalise it yet – and put a copy of your will there. No will? Bad idea! Dying intestate puts your family at huge risk. I have a short eBook on the topic you can get HERE or another blog on the topic HERE
Author Dawn Ridler