You will be able to list the checks for each layer of the system in a yearly review.
Darren set up his payday transfers in lesson 2.4 and has not opened the settings since. That was the idea: a system that runs without him. A year later, his rent has gone up by S$150, he got a pay rise in April, his insurer raised a premium, and his emergency fund target is still based on costs from last year. Nothing has broken. But the system is quietly running on old numbers.
That is what happens to every financial setup that is never looked at. It drifts. A yearly review catches the drift before it turns into a gap. This lesson lists what to check, layer by layer, so the review takes an afternoon and you do not miss anything that matters.
Start at the bottom, because every other layer is paid for from here.
Update your cash flow statement with the last three months, as in lesson 1.4, and compare it with your spending plan. Has your take-home pay changed? Have fixed costs moved, such as rent, a premium or a loan instalment? Is day-to-day spending running above the plan every month? If so, the plan needs to change, because a plan you keep breaking is not one you are following.
Then check that every payday transfer and GIRO arrangement still runs, for the right amount, to the right account. Lesson 2.4's screenshots are your reference.
For the buffer, work out your essential spending again, as in lesson 3.1, and multiply by the number of months you chose. If the result is higher than your target, raise the target and the transfer. If you used the fund during the year, check that it has been refilled under the rule you wrote in lesson 3.3.
In Darren's case, the S$150 rent rise pushes his essential spending from S$2,630 to S$2,780 a month. At five months, his target rises from S$13,150 to S$13,900, an extra S$750.
Insurance needs change with your life far more than with the calendar. Each year, ask what changed. Did you marry, have a child, start supporting a parent, buy a home or change jobs?
Each of those can open a gap. A child or a new mortgage raises the amount of life cover your family would need, as lesson 4.2 explained. A new job changes your group cover, and may end it. A pay rise means your disability income cover replaces a smaller share of your salary than it did.
Pull out your insurance map from lesson 4.4 and update each row. Check that premiums are still being paid, and note any that went up. If you find a new gap, rank it with the others and take it to a licensed adviser, the same way as the first time.
For CPF, repeat the checks from lesson 5.4: every contribution arrived, the balances and last year's interest, and your nomination. Watch the months around any job change.
For debt, update the list from lesson 6.1 with the balance on each loan today. Is the expensive debt gone, or going down at the pace you planned? Has any new debt appeared, such as an instalment plan or a card balance carried over a month?
For investing, look at two things. First, did the monthly amount actually go in every month? Second, does the amount still fit? If your surplus has grown, the investing amount from lesson 6.4 may be able to grow too. If the buffer or a new insurance premium needs the money first, it may need to shrink for a while. This check is about how much you put in. It is not the time to switch funds because of how markets did this year.
For housing, update the plan from lesson 7.3. Has the price range moved? Is the cash and CPF you have saved on track for the target date? If you already own a home, check the outstanding loan and how much CPF you have used.
For retirement, look up your CPF LIFE estimate again on cpf.gov.sg, and compare it with the target you set in lesson 7.2. Is the gap growing or shrinking, and is the monthly amount you planned actually being saved?
For estate, go down the plan from lesson 8.4. Is each document done? Do the names in your will, your CPF nomination, your insurance nominations and your LPA still match your life? A marriage, divorce or birth since last year means at least one of them needs attention, and lesson 9.3 covers these events.
That is nine layers, and each one has two or three questions. Written out, your own version should fit on a single page, one block per layer. Open the layer list you made in lesson 1.1 and start turning each layer into its own short set of checks.
Write your own review checklist with at least two checks for each layer.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).