When should you Re-evaluate your investments?

Having goals on savings and investments is the first step towards achieving your financial settlement. It might be exciting to aim for big goals and working towards them can be a challenging task. When you have set your financial goals you should also review them periodically. It is important because you will know where you are standing and where you want to reach until. The answers to the question when you should re-evaluate your investment will be different for different investors. Here in this article, we will discuss when you should revisit and evaluate your investments. 

Everyone has different goals in life and depending on it you should re-evaluate your investments. Below are general timelines that every investor will face in life and will revisit the savings and investment goals. 

  1. Milestones of life
  2. Re-evaluate before making big purchases
  3. Re-evaluate annually

1. Milestones of life

When you are in the changing phase of your life and some major milestones you are going to achieve during this time it is important to re-evaluate your investments. Take a closer look at your financial situation and financial goals. The changing phase of your life will come with financial expenses. You may need money to meet the expenses of your life. Below are a few situations that will require huge investment money. 

  1. Buying a new home
  2. Marriage event
  3. Expenses for your first child
  4. Child education expenses
  5. Big bonus amounts
  6. New job opportunities

1. Buying a new home

When you have planned to buy a new home or you are planning to relocate to a new location consider the expenses that you are going to incur. Purchasing a new home will need a lot of money and the amount may increase if you are planning to buy in metropolitan areas. 

If you are having a good amount of money you can use it for making a purchase. Find out where your money is going to fit into your budget. If you are having a good amount of money then use the invested amount in having a new home. These financial expenses are not repeated and these one time expenses take a lump of cash away from your funds. You should revisit your investments while managing expenses for these life changing milestones. 

2. Marriage event

Marriage events have a lot of expenses associated with it. Find out the expenses that you are going to incur for the marriage expenses. To incur these expenses take a look at how you can change or reset your financial goals. Finance plays an important role in marriage as settlement of marriage is done only on the basis of finances. Not just marriages, even the divorce is associated with financial expenses. Unfortunately, if someone is into divorce then they have to incur expenses for legal proceedings, alimony and maintenance expenses. 

3. Expenses for your first child

Arranging funds for your first child becomes very difficult especially when you are recently out of graduate school and you buy a home, get married and have a child. You add on expense after expense it becomes a challenging task to overcome the debt burden. The expenses for hospital bills, baby care will keep on increasing as the child grows up. 

Related- What to consider when you are funding your child’s education?

4. Child Education expenses

You should re-evaluate your investments for your child’s education expenses. Education expenses are highly increasing and you have to plan for these expenses. Consider to re-evaluate your investments. Based on the dream of your child’s higher education, make the right investments so that the money will come to you handy when you need it at the right time. 

5. Big Bonus amounts

Big bonus means it is time to re-evaluate your investments. When you get big bonus amounts annually or semi-annually at your job. Utilise the amount in making the right investments. Put that bonus amount to work for you, so that you will achieve your financial goals. Big bonus amounts can add to make it a huge investment for you, make the right decisions of investing and achieve your dreams. 

6. New Job Opportunities

When you get into a new job you will get a hike on your salary. It is time to re-evaluate your investments. The extra amount that you are earning can be put into your investments. Based on your additional responsibilities and income spending habits,you should focus on increasing your investments by re-evaluating them. This will help you to achieve your financial goals and make you financially independent.

Click here How to budget Salary in Dubai? 

2. Re-evaluate before making big purchases

When you are thinking of making a big investment purchase it is time to re-evaluate your investments. Do not look at the monthly installments and think you can pay for the big purchases. Monthly installments look small and have monthly interest components hidden in them. The overall amount that you are paying will be very high. If you are making big investments commitments then other financial goals and payments towards them will be affected. 

Review your monthly budget and all your savings so that they are in alignment with your financial goals. Arrange for any additional expenses that you are going to incur. Look at your financial figures, think and re-evaluate your investments so that you can achieve your financial goals. 

3. Re-evaluate annually

Once in a year it is a good practice to re-evaluate your investments. During the beginning of the year if you have planned for some financial expenses and have set aside certain funds. During the end of the year it is time to re-evaluate your investments. If you have spent very little on your expenses it means that you have good savings and investments money. If you have spent more money then it is time to analyze your expenses. For what you have saved your money is that fund amount accumulating if not find ways to reach your target fund. Having smaller goals will give a sense of achievement and accomplishment of your goals. Check periodically your investments and re-evaluate them. Make every effort to reach your target and this will help you to achieve your financial goals. 

Take away

There is no universal principle way to re-evaluate your investments. Re-evaluating investments is a personal choice. Young investors want to take risks and earn more money quickly. It is advisable to make calculated risk during the process of investment. Do not ignore your investments; it can directly affect your portfolio.  When life events happen, take time to look into them and re-evaluate your investments to achieve your financial goals. 

Meet the author
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Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It’s a commercial mortgage banking company. He has a “Doctoral Degree in Commerce” and two master’s degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.



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