They say, “a goal without a plan is just a wish". Before you start a project, it’s important to make a financial plan so that you can enjoy life to the fullest and make sure you’re prepared for the future.
Also, according to the Financial Consumer Agency of Canada, having a budget or a financial plan is a great way to start saving to reach your goals or be prepared for unexpected expenses. However, 51% of Canadians don’t have a financial plan.
The good news is, it’s never too late to adopt good financial habits and optimize (or create!) a financial plan!
Financial planning: where do you start?
Putting your financial plan on paper is the first step. When you establish your goals for the short, medium and long term, you can create the best financial strategies to reach them.
Here’s some examples of short-term goals:
- Create an emergency fund equal to 3 months of your cost of living expenses in an account that’s accessible at all times and that’s not affected by the financial markets
- Open a tax-free savings account (TFSA) for projects that require quick access to cash
- Meet current financial obligations
- Become debt-free
Here are some examples of medium- and long-term goals:
- Create or update a retirement plan
- Save for your children or grandchildren’s education with the registered education savings plan (RESP)
- Protect your savings with the right insurance product
- Start thinking about estate planning