WHAT IS COMPREHENSIVE FINANCIAL PLANNING?
A comprehensive (or integrated) financial plan looks at the big picture to consider all relevant aspects of your life, including budgeting, investing, tax, retirement, estate planning and debt or risk management. A professional financial planner will take into account various aspects of your financial situation, identifying and analyzing the interrelationships across sometimes conflicting objectives to help you meet your goals.
HOW DOES FINANCIAL PLANNING WORK?
Financial planning is a process that sets you on a course toward achievement of your life goals through the proper management of your financial affairs. Financial planning is more than budgeting and cutting back. The right financial plan balances what you need and want today with the personal goals you have for the future.
HOW OFTEN SHOULD I REVISIT MY FINANCIAL PLAN?
Once you have a plan in place, commit to re-evaluating it at least once a year. Often this review coincides with tax season or the RRSP contribution deadline, but it can be scheduled for any time that works for you and your planner.
If you’ve undergone a change in your job status or family situation, or any other significant life change, make an appointment to take a look at your plan even if it’s been less than a year.
DOES PROFESSIONAL FINANCIAL PLANNING REALLY MAKE A DIFFERENCE?
Research shows that Canadians with financial plans feel they are saving more, living well, and experiencing higher levels of overall contentment in their lives. The Value of Financial Planning, a three-year longitudinal study which included close to 15,000 Canadians, was commissioned by FP Canada and the FP Canada Research Foundation.
The study revealed that, regardless of net worth, Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being than those who do no planning or only limited planning. Those with comprehensive plans felt more on track with their financial goals and retirement plans, felt they had improved their ability to save in the past five years, felt more confident that they could deal with financial challenges in life and felt better able to indulge in their discretionary spending goals.