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Whatever your financial goals are – saving for your children’s education, retiring comfortably or leaving something for your loved ones – having a financial plan is important. With it, you can take better control of your finances and know you have a plan in place to help you achieve your goals.
What is a financial plan?
Think of a financial plan as your personal roadmap. It considers your current financial situation and future goals and should include an assessment of net worth (assets vs. liabilities), cashflow (i.e., income and spending), taxes, retirement planning, estate analysis, and in certain cases, insurance planning.
While everyone’s plan will be unique to their specific goals, a financial plan is designed to help answer three key questions:
- Where are you now financially?
- What would you like to achieve – both short and long term?
- How will you get there?
DID YOU KNOW?
Most Canadians do not have a written financial plan.1
65%
No
35%
Yes
1. Provides a reality check
Not knowing where you stand financially can be extremely stressful. That’s why it’s essential to get an objective assessment of your overall financial health. A financial plan can help point you in the right direction financially and help you understand your spending and saving habits.
Interested in learning more about your income and expenses? The Scotiabank Money Finder calculator will help you determine if you have additional funds available to put towards your financial goals by comparing your income to your expenses.
2. Helps you set realistic goals
Everyone has financial goals, but many people don’t know if their goals are attainable. A financial plan will help you define realistic goals and outline a strategy for achieving them. Setting realistic goals will also go a long way toward minimizing unpleasant financial surprises.
3. Helps identify opportunities
A financial plan can help identify opportunities to save – or perhaps reduce one’s tax burden. For instance, depending on your life stage, topping up your RRSP or TFSA may be something to consider. A Scotiabank advisor can help you navigate both potential opportunities and challenges and recommend a course of action to help you save money, and earn money.
4. Plan for unexpected events and risks
A financial plan can help you identify certain risks and plan accordingly. For example, do you have a will or enough insurance to maintain your family’s standard of living in the event you pass away or become injured or disabled? Is there an emergency fund established to cover job loss or major home repairs? A financial plan can help analyze your current situation in order to put in place appropriate safeguards.
5. Increases confidence and peace of mind
According to a Financial Planning Standards Council study, which included about 15,000 Canadians, the study revealed that Canadians who engage in comprehensive financial planning report significantly higher levels of financial and emotional well-being than those who do no planning or limited planning.2
How long does it take to create a financial plan?
Your initial meeting with a Scotiabank advisor should only take about an hour. This will provide them the opportunity to ask questions about your financial situation, go over your goals and identify any specific needs. While it may take a few meetings to put your plan into action, it’s time well spent. With a financial plan in place, you’ll be more confident knowing that you’re in a better position to achieve your financial goals.
With our knowledgeable advisors, financial-planning tools and range of investment options to choose from, we can help you create a financial plan that’s right for you.
Learn more about financial planning and view some examples of the information you’ll receive in your plan.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.
1 Scotiabank Investment Poll 2023.
2 Financial Planning Standards Council, The Value of Financial Planning, 2012.
