What Is Financial Planning?
Many people are great at planning. They will map out their education, career path, vacation time, and just about everything else. But, there’s one area which many people fear to tread: Financial Planning.
Instead of coming up with clearly defined financial goals and strategies, more often than not, most people just “wing it”. They might make short – term provisions, such as saving the down payment for a house, or scraping together enough for a yearly RRSP contribution. But, they don’t spend a lot of time thinking about how to pay down their debts, make their savings grow faster, or the many ways they can aim for a more comfortable lifestyle today and in retirement.
That’s where a true Financial Plan comes into play. A Financial Plan helps you figure out how far you’ve come, how to set realistic financial objectives and how to get where you want to go.
There are four basic elements to a good Financial Plan:
Measuring your current financial situation (net worth and a budget)
Setting financial goals
Mapping out a strategy to meet those goals
Implementing those strategies and conducting periodic reviews to ensure you are on track
Advantages of having a solid Financial Plan:
- A Financial Plan allows you to plan your finances to build more wealth, and build it faster. This helps ensure that you meet financial goals such as a secure retirement.
- A Financial Plan lets you control your financial destiny. By knowing where you want to go and how to get there, you’ll be more secure and more focused.
- A Financial Plan can let you achieve the best of both worlds; balancing today’s lifestyle with a suitable lifestyle in the future, especially at retirement. Without a plan, you may spend too much today and save too little for tomorrow. Or you could end up living more frugally than you need to as you put away more than is required for your retirement years.
The bottom line is this: if you don’t already have one, you need a Financial Plan. And if you’re just starting to consider one, you can get a head start by contacting Efficient Wealth Management. Then you’ll be well on your way to ‘Achieving Financial Peace of Mind’.
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