Risks to your financial goals

Article last updated: 20/05/09

Below are some general rules for assessing and managing risk. For each risk that you face you can be risk SMART.

See the risk
For each risk, you need to see the likelihood of it affecting you. By understanding a risk, you are in a better position to manage it.

Minimise the risk
If you decide a risk is real and you cannot avoid it, modify your behaviour to minimise it. To do that you need to understand the risk.

Avoid the risk
You can avoid some risks altogether by modifying your behaviour. However, avoiding all risks is generally not feasible.

Retain the risk
In many cases you can prepare strategies to cope with a risk. For example, by saving money that you can use if you really need it.

Transfer the risk
Some risks can be transferred to an insurance company. You need to know the different ways you can do this and what to be aware of when deciding to transfer the risk.