Time to take control of your financial destiny

PUBLISHED : Sunday, 10 January, 1993, 12:00am
UPDATED : Sunday, 10 January, 1993, 12:00am

IF MANAGING personal finances was merely a financial issue, more of us would not need to renew last year's resolution to make our money work harder.

The awareness and urgency of needing to ''do something with my money'' often opens a Pandora's Box of financial issues. Selecting an insurance policy, for example, involves calculating how much life insurance you need and what type of policy would be best. But it also means addressing a host of other issues, such as: where will the family live if the breadwinner dies? What are the estate planning consequences? Armed only with anxiety and the urge to ''do something, anything'' we all too often acquiesce to cold calling stockbrokers, succumb to pitches by forex and insurance sales forces and capitulate to mutual fund or unit trust advertisements.

From a myriad pamphlets, we attempt to sift out facts. ''What's a safe investment?'' we ask. Too many of us choose to do nothing.

''What choice do I have?'' many say. If we fail to begin saving for retirement we choose to struggle in our old age.

Making a commitment to saving is difficult for many. We are forced to take action, review our spending habits and confront our fears.

Intellectually, we all understand what we must do. Emotionally, however, we are often reluctant to implement decisive change.

Let 1993 be the year in which you grab control of your financial future.

Phase 1 - You need to ''do something''. List all your financial concerns and select to resolve at least one of them this year.

Phase 2 - Decide on a sum of money and determine how long it will take to save that amount. Set money aside each month so you can reach your target.

Phase 3 - Find the right investment: if you might need your savings within 12 months, put them into a money market fund. Otherwise, consider investing in a mutual fund or unit trust.

Phase 4 - Accepting trade-offs: seeking financial advice will cost you a fee or commission. If you have done nothing so far, consider just how much you could have earned if you had taken action earlier. If you have been your own adviser, consider paying for a second opinion. If you are seeking professional advice decide which payment structure suits you.

Phase 5 - Choosing your financial destiny: set money aside for your financial goals while you are healthy and employed.

Phase 6 - Commitment: develop a game plan and commit to it one year at a time.

IF YOU have a personal finance query, or need advice with your investment strategy, write to Victoria Lum at Money Matters, Sunday Money, Sunday Morning Post, PO Box 47, Hongkong. Please supply name, address and contact telephone numbers.