What’s In a Comprehensive Financial Plan and Why You Need One
What’s In a Comprehensive Financial Plan and Why You Need One

Most people respond to their finances when facing a financial emergency or making a large purchase. But creating a written financial plan can help you achieve your financial goals and stay on track when life throws curveballs. As it certainly would.

A comprehensive financial plan comprises:

1. A Cash Management Plan

·         Know what’s coming in and what’s leaving — plug leakages.

·         You are purchasing with purpose.

·         Saving towards goals.

·         Having an emergency fund.

·         Spending without guilt.

2. A Credit Plan

·         This can include restructuring of potential tax-deductible debt (good debt)

·         To pay off bad debt.

3. A Protection Plan

·         Insurance — to create an estate or minimize taxes.

·         To protect the family from loss of income when you die or become disabled.

4. An Investment Plan

·         Intentional Investing.

·         Adopting strategies to minimize volatility.

·         An asset allocation aligned with your risk tolerance and financial objectives.

5. Estate Plan

·         Distributing your assets upon death in a way that aligns with your wishes.

·         This should include a Will, Power of Attorney, and A Health Care Directive.

6. Tax Plan

·         Making use of existing tax shelters.

·         Tax favorable investing.

·         Strategies to minimize taxes while alive and upon death.

7. Retirement Plan

·         Planning for financial independenc(Retirement) can be at any time of your life.

·         You have the option to work or not.

·         Pensions/Pension Splitting (RRSPs and 401Ks).

·         Pension Plans (employer plans and public plans).

Bringing it all together

To get a complete picture of someone’s finances, you need to look at all aspects of their finances. No one piece can be fully explored without the other puzzle pieces. Having all the pieces in place provides a solid foundation for building a stable financial future.

A written financial plan helps you achieve your financial goals and withstand unexpected financial curveballs.

Have you got a financial plan?