How simple financial planning can lead to lifelong financial well-being
Putting together a financial plan with the help of a trusted professional can position you to withstand life’s unexpected challenges
By Tashia Batstone, President & CEO,
FP Canada
We all have numbers that serve as signposts in our lives. How many children do we want to have? How much can we afford to spend on a house? At what age are we hoping to retire?
And yet many Canadians don’t apply these kinds of signposts to their personal financial journeys. That’s partly because our finances can seem complicated and intimidating. There are many competing demands when it comes to money, which can make it difficult to get on track towards achieving our longer-term goals.
Research shows that financial planning helps Canadians feel more confident and less stressed when it comes to money. FP Canada’s 2021 Financial Stress Index showed that Canadians who work with a professional financial planner were significantly more optimistic about their financial future and were far less likely to say money stress led to health problems, compared to those who don’t work with a planner (20% vs 31%).
Planning also plays a huge role in financial resiliency and preparing us to overcome the hurdles and unexpected challenges that inevitably arise throughout our lives. When faced with things like job loss, health issues and changes in family circumstances, having a plan makes all the difference in not only surviving these challenges but thriving and emerging from them even stronger.
We know financial planning is beneficial. But in many cases, it’s hard to know where to even start.
Coming up with a plan may actually be less complicated than you think – especially when you have a trusted partner to support you along the way.
In fact, starting with a single number can be the perfect way to get started. Maybe 10 is your number: You’re hoping to retire in a decade. Or perhaps it’s $100,000 – the number you’re aiming to save for a downpayment on your first home. Or five could be your number – by 2027, five years away, you want to sell your company.
If we start thinking about the key numbers that frame our financial goals, we’ll be taking the first important steps towards financial well-being and resiliency.
There are six key pillars of a successful financial plan: managing your cash flow, optimizing your investments, understanding your taxes, planning your retirement, leaving a financial legacy for your loved ones and insuring against the unknown.
Working with a financial planner allows us to build a plan that reflects all six pillars and proactively work towards meeting our goals in each of those areas. That’s an achievement which will not only build financial health and resilience, but also has the benefit of easing anxiety and improving our physical and mental well-being.
It might seem daunting, but professional financial planners, such as CFP professionals or QAFP professionals, have the skills, competency and ethics to work with Canadians to create a holistic roadmap towards achieving our life goals.
It doesn’t need to be complex, intimidating, labour-intensive or time-consuming, nor does it need to focus on all six pillars. Together with your planner, you may decide it makes more sense to focus on one specific goal, depending on your age, the stage of your career and your personal circumstances or preferences. But even coming up with one number will often result in the others falling into place.
Putting together a financial plan that’s flexible and easy to follow, and working with a professional to help you do so, will ensure all your numbers add up as life unfolds – and will position you to withstand those unexpected challenges that inevitabily arise along the way.
Reach out to a financial planner in your area who can help you get on the path towards financial resiliency by visiting FindYourPlanner.ca.
To view this report on The Globe's website, visit globeandmail.com
To view the full report as it appeared in The Globe's print edition: Financial Resiliency