Everyone’s financial plan will differ, not only because we all think and value things differently but also because our needs change throughout our lives. A financial plan is one of the most important and easiest ways to keep track of your goals and whether you are making any progress in achieving them. It is important to update your financial plan each year or whenever there is a change.

In order to have a good financial plan, focus on eight key elements to help increase your chance of success:

1. Budgeting and taxes. A budget gives you an overview of your income and expenses and helps keep your spending in line. It is crucial to have a regular and updated budget if you want to improve your circumstances and potentially save money. Know what type of taxes apply to current and future investments, and how they will affect income and withdrawals.

2. Quick access to emergency funds. If you have savings, manage liquidity by making sure that you have quick access to these funds in an emergency. Be aware of capital gains tax on any withdrawals from voluntary investments.

3. Financing large purchases. Know what you are getting into when financing a large purchase. Typically, it takes longer to pay off the debt on large payments, and you pay more interest. Make sure that you can comfortably repay the debt and do not take on more debt by falling behind on repayments. Pay debt off as quickly as possible, starting with the debt with the highest interest rate.

4. Managing your risk. Have adequate life and disability cover in place to ensure no shortfalls should anything happen to you. Short-term insurance is also an important cover to have in place. In the event of a loss of a higher valued asset, you will need to be covered by your short-term policy to ensure that your asset can be replaced or if financed, the debt paid as a result of the loss.

5. Investing your money. Look at investing in more conservative investments such as cash and bonds for shorter-term investments (over one to three years) and add more shares (equities) to longer-term investments (five years or longer). Compare costs, as some investments will be with you for a long time and paying lower fees from the start is better. Often, investors only realise later that there are better or less expensive products available and when clients decide to change providers or stop contributions to take out new investments. Depending on the product, providers will charge early cancellation fees when changing or stopping contributions before the maturity date of the investment.

6. Planning for retirement. Start planning your retirement as soon as you can; the longer you wait, the larger the shortfall. An effective way to get used to higher contributions for retirement is to start on the maximum allowed contribution at your employer. Those who are working should ensure they increase their contributions by a small percentage each year. This way you will get used to paying the higher contributions and can help form good habits of saving for long-term goals.

7. Communication and record keeping. Form a close relationship with your financial adviser and feel comfortable asking any questions, no matter how insignificant they may seem. It is better to be educated and informed than to assume. Keep a record of the reviews for your investments and go through them with your financial adviser. It is also a good idea to register on the online platforms for your investments so that you also have access to view balances and portfolios.