Financial plans are important to reach your goals. The problem is that many Canadians do not have one, or they don’t know if their plan is working for them. A comprehensive financial plan will help you set clear financial goals and develop strategies to achieve these goals. A comprehensive financial plan can be the difference between success and failure when it comes to meeting your personal finance objectives!
In a recent survey, 51% of Canadians said they had a financial plan. However, one-third of those said the plan was in their head! That gives us only 34% of Canadians who have a written plan! Two-thirds of Canadians do not have a formal plan to achieve their goals and manage their risks!
There’s good news though!
In 2013, FP Canada conducted a three-year research of almost 15,000 individuals. Those who had a financial plan had a considerably higher success rate than those without one.
Here are 6 benefits that people with a financial plan experienced:
1. On track with financial affairs
Planners are more likely to feel on track with their financial goals and futures compared to people who do no planning. Without a plan, it’s easy to be unaware of where you are financially and what your options are.
In addition, those without plans tend to spend more money. Without a written financial plan, people don’t have an accurate picture of their income or expenses which can lead them to overspend due to the lack awareness of their cash flow situation.
2. On track to retire
Those who see retirement as an important goal felt that they were more confident in their retirement security and plans to retire.
A lack of planning can lead to problems with your retirement. Without a written financial plan, you’ll be unsure of how much money you’ll have in the future and which goals will become priorities for spending during this time. A financial plan is important in helping to put together the puzzle pieces of retirement (Government benefits, RRIFs, pensions, etc).
Failing to make necessary adjustments could negatively affect your ability to retire when planned!
3. On track to save
Planners are more likely to have improved their ability to save and invest.
Having a written financial plan better enables the setting of long-term savings goals. A lack of planning prevents people from knowing how much they are saving and what is most important to them financially. This can cause problems down the road when retiring or adjusting spending habits after life changes (i.e marriage, divorce, job loss).
4. Can deal with bumps in life
Planners are more confident in dealing with unexpected financial emergencies and tough economic times. They are more confident that loved ones will be okay financially if an unfortunate event such as death, disability, or critical illness happens.
When such events happen, people with a financial plan will be able to focus on what matters instead of worrying about their finances. They’ll also be more aware of government benefits and other sources that can help them out in times like these which could end up helping them avoid bankruptcy or foreclosure!
5. Can live life abundantly today
While saving for the future is important, we must enjoy our lives today! Planners were more confident in reaching their important “today” goals while being on track for the future.
A written financial plan allows for the planning of short-term goals. These can include that dream vacation, purchasing new furniture or even buying your first home! A lack of planning could mean you never achieve these life milestones which will end up affecting your happiness and self worth long term.
Ready to start living the abundant lifestyle you deserve? A financial plan can help you get there!
6. A Stronger sense of well-being
Those with comprehensive financial plans have higher financial, emotional, and overall contentment.
A financial plan helps to make sure all areas of life are covered meaning that you can be more content with yourself and your situation as a whole! Planning out goals allows for the necessary steps towards achieving them to become clearer which will allow for progress along this journey instead of remaining stagnant or worse, regressing.
A lack of planning can cause anxiety and dissatisfaction with life which negatively affect your overall mental health!
It’s important to have a written financial plan in order to be on track for retirement, saving money effectively or dealing with life’s bumps. If you are considering starting one but don’t know where to get started, let us help! Our team of advisors can do the heavy lifting and create a strategy that will work best for your situation. To find out more, contact us today. A comprehensive financial plan is an investment worth making because it could make all the difference when it comes to achieving the financial goals that matter to you.
To get started, why not schedule a short conversation with us?
You might also enjoy our podcast episode entitled “Start a Financial Plan.” You can click below to listen and subscribe!