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Developing a Financial Plan

February 9th 2016 - Betty Anne Flynn


What does “Financial Wellness” mean to you? Does it mean being debt free?  Having enough cash flow to meet your monthly expenses?  It might mean owning a home or having substantial savings.  Simply put, financial wellness is different for everyone but starts with defining your goals then developing a plan in order to achieve them.

Putting a plan in place may seem overwhelming, but it becomes much more attainable when broken down into small steps.  Let’s use the road trip analogy.  You start with a destination – this is your goal.  You are driving from Toronto to Los Angeles.  You know your starting point and you know your destination, that’s it.   A proper plan will break the trip down into smaller steps.  For instance, how far you will travel each day, what route you will take, what accommodations you will need and what you hope to see and do along the way.  You get the gist.  Planning to achieve financial wellness uses the same premise – break the plan down into smaller and easy to follow steps.

 Next, estimate (but don’t guess) how much money you will need.  A friend was planning a wedding, and she “guessed” that $10,000 would cover her small intimate celebration.  My thought upon hearing the “wish list” was that $10,000 wasn’t enough.  We sat down and made a list of the estimated cost of each component, and to her surprise she needed double the amount of money.  Next we took the guess work out of the equation and spoke with experts to get the actual costs. Again, our guesses and estimates were way off, a very valuable exercise prior to committing to details.  The option now became scaling back on some of the wish list, or taking a little longer to save for the wedding she wanted, both reasonable options. 

If your goal is to purchase a home, you’ll need to do your research.  Talk to a real estate agent to find out the price of homes in the specific area you want to live.  Ask about what additional costs need to be considered:  closing costs, land transfer taxes, legal and moving fees.  Talk to one of our mortgage specialists to find out how much of a mortgage you qualify for and how much of a down payment you can afford.  

And finally, talk to me.  Once you know how much money you need to achieve your goal, we can work together to create a savings plan that fits within your budget.

In future I’m going to show you how to create a personal budget and I’ll provide helpful hints on how to eliminate or reduce expenses.  I will also talk about saving and how to use your RRSPs as a down payment for a house under the Home Buyer’s Plan. 

Set a goal.  Do your research.  Start planning.

Written by Betty Anne Flynn