Comprehensive Financial Plans and the Sound Sleep that Follows

By Ken Power, October 2018

42% Canadians rank money as their greatest stress according to a national survey conducted by Leger. Financial stress has been reported to have a profound effect on our nervous system and our overall physical and mental health. It often keeps us up a night and can cause us to be unproductive at work.

Financial stress can invade our lives from many sources:

• I’m barely able to pay my bills.” The stress of having unmanageable post-holiday/vacation debt, student loans, credit cards, mortgage debt.

• “I’m going to have to work forever.”  The lack of a clear retirement plan can be very stressful.

• “I’m one emergency away from disaster:  What happens if I have a loss of income from a lay-off or illness or injury?  What do I do if have an unexpected large expense?”

• “I don’t want my children to be saddled with student loans, but I don’t have a plan to help them with their university education expenses.”

• “When do I use a TFSA versus a RRSP versus a RESP, versus a Non-registered account?  I don’t understand all these financial acronyms.”

For many Canadians, it is common to seek help from a professional medical practitioner when we are not feeling well.  However, at times, the choices are confusing: do you go to a family doctor, a specialist, a naturopath, an acupuncturist, a chiropractor, a physical therapist, an osteopath, or a mental health professional? 

It is less common for Canadians to seek professional help for our financial wellbeing, often because we don’t know where to go for help, and it seems many financial services professionals are focused on selling us investment and/or insurance products. If financial issues are causing stress in our lives, a person selling investment products and insurance will often cause even more stress.

I know Canadians can significantly reduce, if not eliminate, financial stress in their lives if they have a comprehensive financial plan in place.  In fact, Canadians who have a comprehensive financial plan in place report significantly higher levels of financial and emotional well-being than those who do not.[1] 

How would you like to:

• Be on track with your financial goals and retirement plans,

• Feel Confident in your ability to save/invest enough money to achieve your financial goals,

• Know your family will be ok should something happen to you,

• Be prepared for financial emergencies and/or touch economic times,

• Balance your wants and needs today with your goals for the future, and

• Improve your financial literacy

If you want a sound sleep and Financial Peace of Mind, then you should have a comprehensive financial plan that is monitored and updated regularly. For most people it is reassuring to know that a comprehensive financial plan will help you live the life you want with the resources you already have.

To get help creating a comprehensive financial plan you want to look for a CFP^® (Certified Financial Planner professional). Although many professionals may call themselves “financial planners,” CFP® professionals have completed extensive education, training, and experience requirements and are held to rigorous ethical standards. These professionals are required to keep up-to-date knowledge on the complexities of the changing financial climate and know how to make financial planning recommendations in your best interest.

By working with a CFP^® professional on a Fee for Service basis, you can trust that your financial plan and the recommendations included are based on your best interest.  Your planner is not earning commissions by selling you products, they are working in your best interest to create a financial plan tailored to your individual goals and circumstances.

Financial Plans are not just for the wealthy.  In fact, Canadians of all ages and all levels of wealth should have a financial plan. I find that most people will fall into one of the following categories:

Foundation Builders

Individual/couple, late 20’s to early 30’s. Wants to purchase, or has recently purchased, a home.  Have young children or looking to start a family. May have too much “bad debt” used for vehicles, home furnishings, and children needs. Wants to start their adult life off with good money management habits.  Wants to build a foundation for financial success.

Wealth Builders

Couple early 40’s to early 60’s.  Has sufficient cash flow to direct toward financial goals.  Has little “bad debt”.  Has started saving for retirement and children’s education. May have an advisor providing investment advice, yet don’t have an overall financial plan and are worried they are not going to achieve their financial goals.

Converting Wealth to Income

Individual/Couple 55+.  Has generated wealth for retirement (pension plan, RRSP’s, other investments).  Is preparing to retire or has recently retired. Not sure how to convert their assets into tax efficient income during retirement.  They are worried about market volatility and if markets collapse again like they did in 2008 they are worried it will have a major impact on their retirement plans.  Not sure they are prepared for the two biggest risks in retirement;

• Longevity – will they outlive their money,

• Inflation – will their retirement income keep up with inflation.

To have a Sound Sleep work with a CFP^® who will work with you to create a comprehensive financial plan, help you implement the plan, and be your financial coach to monitor and keep the financial plan updated as life unfolds.

Peace