What is a financial needs analysis?

If you want to get serious about your financial plan and achieve your financial goals, you need to complete a financial needs analysis (FNA). Here is a beginner’s guide to help you get started.

What is an FNA and who completes it?

An FNA is to analyse your current financial situation, your future financial needs and goals and what you need to do to reach these goals. Because it gives you a complete picture of your finances, an FNA also ensures that you are sold appropriate financial products that you can afford, that are not too risky and that will help you finance your dreams and ambitions such as having enough money for retirement.

You can complete an FNA online, or ask a qualified financial advisor or certified financial planner to help you.

A good financial plan starts with a financial needs analysis

Why do you need an FNA?

• It gives you an objective view of your financial status, which helps you get a clear and complete picture of your finances
• It identifies any shortfalls or overlaps in your financial products, for example if you have enough or too little life insurance

When you have completed an FNA, you can build a financial plan that is affordable and unique to you.

What you will need to complete an FNA

• Your income and expenses or your budget
• Your assets and liabilities - this would include assets such as property and liabilities such as any loans and debt you have
• A list of all the financial products you own such as life insurance policies, funeral policies and investments, as well as any medical aid and health insurance you have
• Any employment benefits you have as part of your salary package, such as group life insurance and medical aid benefits
• Personal details such as marital status and any children or other dependants you care for
• Personal financial goals such as a sabbatical you want to take or a particular date you want to retire on

When this information is included on the FNA, and the FNA is completed, recommendations can be made on how you can achieve your financial goals. For example, an FNA can show:  

• How much you need to save for retirement so that you don’t have to dramatically change your lifestyle when you stop working
• How much you need to invest and save towards an emergency fund as well as other savings goals like home renovations, your children’s education or a holiday
• How much life cover and funeral insurance you need
• How to insure your income against temporary or permanent disability with disability insurance
• How you can protect yourself and your family against dread diseases such as cancer or strokes with dread disease cover

You can use these recommendations to build your financial plan. Remember to review them at least once a year to make sure any changes in your life are included in your plan.

Financial planning and financial peace of mind starts with an FNA

Completing an FNA may seem like a lot of work, but it really is a good idea. It identifies what you need to do to ensure that you and your family are financially provided for should something happen, and that you will be financially comfortable in your retirement.

Originally posted: 3 March 2014
Updated on: 7 December 2020