The real value of a financial plan

financial plans and their real value


The number of new clients I work with who do not have a current financial plan, or who have never had a plan is astounding. The terms financial advisor, and financial planner have for whatever reason become synonymous with someone who simply picks your investments for you, and answers other financial questions if your lucky.


The basis of any financial planning, or financial advisor relationship is based on having a proper financial plan. After all, how can you determine how much you should be saving, how much risk you should be taking, and how much you need for your goals, if you haven’t created a plan?




The value of a financial plan is simple. It allows you to make informed choices about your financials, rather than guessing. For most people, they don’t know what difference it will make to their future if they save $500 a month or $750 a month. Since they don’t know, they can’t see the value. If you can’t see the value, you are far more likely to spend that additional $250 a month than you are to save it. On the opposite end of the spectrum, we see those who are so stressed and anxious about their money that they hoard it, refusing to take on any risk, and living an extremely frugal lifestyle unnecessarily.


A good financial plan will allow you to understand the impact that your choices and decisions make. You can review how it impacts you if you buy that boat or car. You can see what would happen to your financial future if you saved 20% more per year.


Ideally a financial plan will take the stress and noise out of your financials. Rather than trying to understand how your locked in retirement account works, which pension option you should choose, which investments you need to be in, and so on and so on. You can focus on the big picture and make educated decisions about which direction you want your life to go.


Once you have chosen your direction and understand the impacts your choices will have on that, then you can go ahead and start looking at the smaller decisions. Such as should I lower my fees through ETF’s, do I buy back years on my pension, should I contribute to my RRSP for the RRSP home buyers plan. None of those questions can be appropriately answered without a proper financial plan in place.


In my experience, there is nothing more valuable to your financial future than having a financial plan laid out for you. Tailored to the goals, choices, and decisions that you want in your life.



The best part? As your life changes and your plans change, you can simply update your plan and move forward with a fresh outlook and renewed confidence that you have a bright future ahead of you.