The value of a financial plan

By Michael Gee 2 October 2018 4 min read

If you were embarking on a major road trip, and you had a specific timeframe to follow, you wouldn’t start driving without a roadmap or without at least checking your route on Google maps. You need to know the specific distances between each stop, where you can get gas or a bite to eat, how long and how far you can drive each day and have a good idea of when you might make your destination.

Without a plan, unfortunate things could happen. You could run out of gas, miss your time deadlines, get lost and maybe never reach your destination.

The same goes for financial planning. You need to have a road map so you know how to navigate the markets, properly budget and can be sure to achieve your goals. Put together with the help of a professional financial advisor, a financial plan will show you where you are going, how to invest and give a clearer picture of how you’re going to get where you want to be.


DIY investing without a plan.

I’ve seen people who want to save for their future, so they start socking money away but without a real strategy or plan. They have a goal, but just don’t know how to get there. Sometimes this can result in making riskier investment decisions than necessary and causing a lot of stress and eagerness over those decisions and their future.

To put it bluntly, they are on a road to nowhere and don’t know how to get there. Even though you’re putting money away, do you know how to reach your financial goal?


Financial planning can meet short-term, mid-term and long-term goals.

The main reason why clients come to see a financial advisor is to get some help putting together a long-term financial plan, usually for saving for retirement or a child’s education. Having a strategic financial plan can help you reach those big financial goals in the timeframe you need them to, but can also help you with mid-term and short-term goals along the way.

Mid-term goals could be saving money in an RRSP to take advantage of the Home Buyer’s Plan in order to make a down payment on a house. It could also include saving for a new vehicle, vacations or paying down debt. Short-term goals would be making sure you have enough liquid money for emergencies like a sudden home repair or an illness that requires access to quick cash.

With a clear and strategic financial plan, we can make sure that you are always headed in the right direction for that long-term goal, and still meet the mid-term and short-term goals along the way.


How can a financial advisor help?

The first thing a financial advisor will do when you meet with them is talk to you and get to know your specific situation. They’ll go over your family history, income, comfortability with investing and discuss your financial goals. They will also talk about things like your budget, potential roadblocks and other factors to consider when developing a financial plan that will meet your goals.

Then the financial advisor will create the financial plan and show you what you need to do to reach those short, mid and long-term goals.

Once the plan is in place and you are investing regularly, the financial advisor will monitor and review the plan as you go. This will make sure your financial plan is on track and if things change, the plan can be changed. For example, if you suddenly have a lower or higher income or you’ve gone into some debt, we might need to make a change to your financial plan to ensure you’re still going to reach your goals.

It’s important to remember that your financial plan is a breathing, living document that needs to be changed if the market changes or if your personal situation changes. That’s why it’s important to keep in touch with your financial advisor so they are aware of these changes in your life and can adjust your financial plan so it will still take you where you need to be.


The fast road doesn’t always get you there in one piece.

A good financial strategy usually takes time. You will achieve your goals, but you have to trust the knowledge and expertise of your financial advisor and allow your investments to take the time they need to grow.

Let’s say you are going on that road trip and there are two roads that could get you there. One is a straight, smooth and well-maintained road, but it could have a lot of traffic and a slower speed limit. The other is a rough, winding road that has lots of hills, bumps and potholes, but no traffic and you can generally drive faster. Would you take the rough road, that could potentially result in a damaged vehicle or a breakdown, because you might arrive half an hour sooner? Or would you choose the smooth, well-maintained road that will require a bit of patience, but will certainly take you safely to your destination?

If you’re ready to create a financial plan, contact an ATB Wealth Advisor in your community. They’ll make sure you’re following the right road and give you peace of mind knowing your plan will bring you to your financial goals.

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