Readers have voted. The verdict is in. They want the Financial Review Series to run consecutively each week until done.

Thank you all for your feedback, it is so greatly appreciated.

Now, if you should become totally bored with these topic, please let me know. Although let me state now, that your financial review can be easy, or it may be all-encompassing, just as complex as you are, in your personal and business life. Caveat: you don’t have to change anything, you may find you feel just great about your current financial situation, or you may be facing some real homework.

Readers, today is a significant date for the Moneywise finance column, now entering its fifteenth year. Over this longer-than-a decade time frame, the financial world has been through two stock market crashes (and a couple of minis) along with the accompanying recessions affecting most countries on the globe.

Typically, in perfect business textbook cycles, each economic contraction, over time, has brought new global opportunities for increased growth and forward mobility.

However, these financial events never happen without inflicting random financial pain on unsuspecting ordinary people just getting about the process of daily living.

We now have astoundingly instant access to information of all kinds.

Where before we could not locate enough information to figure out where we were financially, leading to frustration and incorrect decision making, now rampant unfiltered information is so readily available, it can flood the senses into complete overload — leading again to total frustration.

Understanding your personal finances today is more important than ever.

You are challenged to wade through the glittery financial vernacular, the gloss, and the gloom to figure out what you have, what you can do with it, and use your resources to make a personal financial plan that works for you.

Sensible, practical, and doable — all engineered by you, for you.

Cash: Series Part Two — continuing the discussion of reviewing your cash.

Cash — a summary.

Generally, most people have a checking, savings account, possibly one or more term (fixed) deposits (it appears that at least one local bank has phased out call deposits), and if they are feeling a bit more confident, a money-market account. Bermuda residents have additional complex choices due to our international finance centre innovation. We can choose to hold term deposits in as many as twelve different foreign currencies, while money market funds offer almost as many choices.

Checking accounts held in Bermuda dollars do not generate interest income in Bermuda banks. Therefore, the cash held in your checking accounts should be a sufficient balance consistent enough to cover your recent bills. All of your income earned locally in Bermuda dollars should be directed to your Bermuda dollar statement savings account. Cash can then be distributed out as needed to the checking account for expenses, credit or debit card purchases. Set up several savings accounts for different goals if you can and have the energy — one for serious fears of redundancy, for future rent or mortgage payments, education, etc. Apportion out cash from your BMD original statements to these “special accounts” when and if you can. Try not to hit them up for other things, particularly impulse purchases.

Check your statements for all deposits recorded, ask if all expenses yours, are you having a hard time identifying all those ATM withdrawals, all bank fees accounted for? If you’ve had too many overdraft charges, up the amount you move to your checking account. Better yet, if you know your monthly expenses (this means setting up a budget), authorise a standing order transfer to cover your checking account from your statement savings. Monitor your accounts regularly, at least once a week, preferably every day — quick check. Trust no bank or person’s ability to manage your money the way you can.

Keeping a low checking account balance can be problematic if you forget to replenish the balance; however, a low balance inhibits large unauthorised withdrawals and also allows the savings accounts to earn a bit of interest. Yes, I know that is not the case currently with interest rates so low, but interest rates will rise (when, we don’t know) as will money market returns, given that markets still tend to run in cycles.

So very often, readers will complain about low interest rates. “My cash is doing nothing.” “My broker says I should be fully invested if I want to beat inflation.” “Look at all the returns those stock markets are getting, and I am losing out.” Investments should be considered, but they are the last item on the guidelines list. Why? The first and most serious part of your financial review is understanding and managing your financial risk.

Next: Moneywise Financial Review Part 3

Term and fixed deposits in other currencies — get a jump on understanding currency exchange for next week and review the website ‘How exchange rates work’ Find it at http://money.howstuffworks.com/exchange-rate.htm

Money funds investments, short-credit cards and long-term debt. Where do you stand? is also scheduled for next week.

Financial Review Part One can be found in The Royal Gazette here: http://www.royalgazette.com/article/20140118/BUSINESS08/140119756

Finally, the website www.moneywiseBermuda will be soon in the process of a major upgrade. Limited space does not permit me to fully explain each of the financial review concepts each week, but, once the upgrade is complete in a couple of weeks each full article organised sequentially will be available for reference.

Martha Harris Myron JP CPA PFS CFP is a Bermudian journalist and a cross border financial planning specialist. Pondstraddler Life™ Consultancy provides offshore financial perspectives for international citizens living, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle: United States, Canada, United Kingdom, Europe, and the island of Bermuda, the premier international finance centre.

Contact martha@pondstraddler.com

This is a general information educational article and cannot be used as recommendations to buy, sell investments, implement a financial plan. Readers are advised to consult with their personal professional advisers.