Building your financial future can take a long time. I mean, a really long time. From opening your first chequing account and getting your first car, to mortgages, loans and planning for retirement — that’s a lifetime of financial planning. And if that sounds intimidating, well, it can be. That’s why it’s a good idea to break things down into more manageable chunks. That brings us to our 5 - Week Fitness Challenge!
Think of these 35-or-so days as a microcosm of your financial life. By whittling it down, you can focus on what you want to accomplish further down the road.
Set your goals. This is the big picture. Include everything you want to achieve, experience and enjoy. Vacations, that great house in the even better neighborhood. Investments and paying for your kid’s education. Jot it all down.Try to be as specific as possible.
Breaking it down. Try taking the goals you set in WEEK 1 and breaking them down into three parts. For part one, include more immediate goals like getting a car, saving a modest amount of money, that sort of thing. Next, it’s on to the things you want to accomplish in the next three-to-five years. This might include saving for a vacation, getting that house you’ve always wanted or having kids. Finally, part three is where you’ll forecast the remainder of your financial goals — saving up for a post-secondary education (or educations), saving for your life after work, etc.
First things first: Now, it’s time to prioritize. Take each of the three parts you established in WEEK 2 and focus on your number one goal for each part. Like I said before, planning your financial future can be daunting, so paring it down to one achievement at a time can make matters much easier.
Knowledge is power. With the advent of the Internet, information has never been more accessible. For instance, if you want to remodel your bathroom, hop online and compare prices. Thinking of getting a new car? Search what type you want, is new or used the best option, should you finance, lease or buy, etc.
Be flexible. Like most things in life, financial planning needs to be adaptable. Your circumstances can change as time goes on, and thus your financial needs may change. Having a solid plan is still important, but so is being able to recognize when it needs to be changed to better meet your immediate and future needs. So, if something unexpected does come up, revisit your plan and tweak accordingly.
Discussion Question: What are some of the techniques you use to stick to your financial plan once you’ve created it?
Share your financial tips and tricks in the comments section and you could win a $50 Tim Hortons gift card. We’ll select one lucky winner a month. Be sure to check out our other financial columns and find more information at NorthernKnowHow.com. For full contest details, click here.
About the Author: Geoff Phillips has been helping Northerner’s reach their financial goals for over 20 years. With offices located across Northern Ontario, he currently leads a team that provides a member-focused approach to developing customized financial strategies. Tax efficient income and legacy protection with a focus on risk management allow members to pursue their goals.