Four Basics of a Financial Plan
Spring isn’t just a time for smelling the flowers, with income tax season just behind us and property taxes on the horizon, it’s also a time when many of us have to face up to truth about our financial situation. If you’re like most Canadians, chances are you’ve had your share of sleepless nights worrying about debt or other financialproblems. According to the Financial Planning Standards Council (FPSC), a large number of Canadians have identified personal finances as one of the major sources of stress in their life. It’s no wonder; the news is filled with stories about rising household debt levels, the dismal savings rate, and gloomy odds for a happy, healthy, and financially secure retirement. There are some key considerations to make if you are ready to retire that can help to ensure the transition to retired life will allow for financial security and ultimately an emotionally healthy retirement.
Having a financial plan isn’t just for rich people and it doesn’t have to be expensive. Someone’s plan might consist of the idea of checking out how to get online loans no credit check, whereas someone else’s might be to speak to a financial adviser, in the hopes of getting their financial life sorted. Where this may be the case, some people may not have even considered dealing with their finances, as they may be worried to find that they may not be as financially stable as they may have thought. This is why staying on top of your finances at least every month will help put things into perspective. Even if this is the case, it is nothing to be embarrassed about, as many of us go through financial hardships at some point in life. It could even be as simple as checking out a site like ithinkfinance.com to find ways on how to sort out your finances, as this could help you get your financial life back on track.
Even if someone is at the stage in their life where they are thinking about retirement, checking out tips for a stress free retirement may help make this process a lot easier to deal with, especially as this is a big transition in anyone’s life.
Some financial institutions provide this service free of charge, ask yours if they do. In any case, mapping out your financial future isn’t as difficult as you think and whether you work with a financial advisor or do it on your own here are four things your plan should include:
A view of the big picture: Your financial well-being isn’t just about investments, it’s about many aspects of your life…saving for a home, protecting your family with insurance, planning for the unexpected, structuring debt properly and making sure you have enough left over for the fun and relaxation you deserve. Start by creating a financial statement that shows everything you own and everything you owe, so you can get a clear picture of your net worth.
Set some goals: Make a list of your most important goals. This should include both short term goals (say 2-5 years) as well as long term goals (5+ years). Keep each list to a few items or prioritize the items and focus on a few at a time.
Decide how you will measure your goals: The difference between dreaming and doing is action, but it can be difficult to know where to start. Having a way to measure goals makes it easier to get going and setting monthly targets will help you keep moving in the right direction. Making a budget that details all of your income and expenses will make it easier to see exactly where your money is going.
Re-evaluate regularly: Your life is always changing and unexpected things can happen along the way. Your plan needs to change right along with you, taking important life events into consideration so you can keep your dreams on track.
It?s very common to feel stress about personal finances: ?Am I saving enough for the future? How do I choose the right investments? Am I living beyond my means? Why is it so difficult to scrape together a down payment? Do I have enough insurance coverage?? These are the kinds of questions that can keep you up at night when you don?t have a financial roadmap. If you`re feeling overwhelmed, a financial advisor can help you plot that roadmap and take control of the big picture so you don?t have to worry…which means you can get on with life and look forward to planning the things you want to do.
This article is courtesy of Prospera Credit Union (to learn more, visit www.dontjustbankprosper.ca)