Every life stage comes with new ideas, new dreams for the future, and new questions. At each of these stages you should be reviewing your plans and setting financial goals. A financial plan will give you peace of mind, confidence in your future, and will assist you in meeting your goals!
However, a financial plan can also be a big step for you, and it can be easy to get overwhelmed. You probably have a lot of questions: What’s the first step in financial planning? How much money do you need to start? When should you start? What should you be doing with your money?
First Steps in Financial Planning
One of the first things in financial planning you want to think about is budgeting, especially if you’ve never done a financial plan before. When you create a budget, you know where your money is going. Then think about what your short-term and long-term financial goals are.
Start thinking about outgoing expenses first, like rent or mortgage, utilities, credit card bills, or even your Tim Hortons trips! Add up how much you’re spending daily, weekly, monthly. This will help establish a baseline of where your money is going. You’ll also want to know exactly how much debt you have, such as your mortgage and line of credit. If possible, learn the value of your assets, such as your home or car.
What money is coming in to your accounts? Do you already have investments in a registered investment plan? Do you receive any pension plan statements or information from work that shows you’re putting money into a pension plan (including Canada Pension Plan, Old Age Security)? Have you hit your registered retirement savings plan and tax -free savings account contribution limits?
Then, make a list of big goal purchases: buying a home, saving for your children's education, saving for retirement, paying down debt, buying a vehicle, or taking a vacation. Once you know what you’re saving for, and you know how much money is going out and coming in, you can start thinking about what you need – or how much money to put aside!
How much money do I need to start planning and what should I do with it?
Simply put – no amount is too small and it’s never too early to get started! Once you know what your finances look like, you know how much money you have to start saving. While the more money you can comfortably and confidently put aside for growth is better, even a small amount is worth setting aside to begin watching it grow. Keep in mind, the more complex your finances, the higher the level of advice you might need.
And what do you do with your money – that’s up to you! What’s important to you? What are your financial goals? Most of us want to retire one day. You’ll need to plan for this. If you start planning early and then continue planning through the various stages of your life, you'll have confidence that you have saved enough to retire in the lifestyle that you dream about.
Do you need to pay off debt – like post-secondary loans or a car – while figuring out how to purchase your first home? Maybe your goals include looking at socially responsible investing, giving back to your community, or planning your final estate.
Ultimately, whatever your goals, what to do with your money needs to make sense for you. What is right for you might not be right for someone else – and that’s okay. Planning your financial future is uniquely based on the individual and making sure that the goals you have are within reach.
Who do I talk to about creating a financial plan?
Kindred’s Wealth and Investment Team provides expert advice and the investment options you need to reach your financial goals. Whether you’re new to saving and need some advice to get started or if you have more complex needs that require a more formal planning approach, we can help you crunch the numbers to give you peace of mind. And, at Kindred, we do not charge for financial advice!
Of course, the final decision is always yours. The role of Kindred’s Wealth and Investment Team is to answer all your questions and offer personalized advice that helps you work towards your dreams. We’re committed to sharing our expertise, simplifying your options, and offering you choices that align with your values. Honest conversations will help us understand your financial position and your priorities, so we can develop a plan using your money in a way that fits your values.
You have places you’d like to go, and we’ll help you get there! Speak with a member of our Wealth and Investment team today. We’re here to help you Make Peace with Your Money®. You can ask us anything!
Mutual Funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.