Forge Your Future | The Essential Guide to Financial Planning

A financial plan plays a critical role in helping you to achieve your financial goals. Here we'll explore what a financial plan is, why it’s important for individuals and families to invest time in creating one, and when and how to develop a robust financial plan. We’ll also discuss the frequency of reviewing and updating your financial plan to make sure it remains relevant and effective.

What is a financial plan?

            A financial plan is a complete assessment of a person’s current financial circumstances. Consider it a statement of your goals and the process necessary to achieve them, a monitor of progress and assessment of outcomes, and as required, it can help you determine when adjustments are needed.

Why is financial planning essential for individuals and families?

            A financial plan simply encourages you to purposefully identify the financial goals you have. It then facilitates a focus on the process that is believed necessary, to accomplish those goals.

When should you develop your financial plan?

            A financial plan provides you with the greatest value once you have established, and taken control of your financial obligations i.e., mortgage, car payments, child education, etc. In addition, once you’ve accumulated and continue to add to your savings, a financial plan becomes far more tangible, as opposed to trying to rely on a plan where the assumptions are constantly changing. 

Unfortunately, until these conditions exist, a financial plan will not change your ability to save and make meaningful progress towards meeting your goals. While a financial plan can most certainly be developed before this, the best approach is to simply focus on saving as much as possible by gaining control of your spending.

What does a strong financial plan look like?

            A solid financial plan is one that you can relate to and understand. Otherwise, you are less likely to practically use it as a resource. In addition, a good financial plan will encourage you to reference and work through it as the means to achieving your financial goals. 

How often should I review my financial plan?

            At a minimum, you should review your financial plan annually with your advisor. You should also update it when you experience a life event that wasn’t considered in your financial plan, for instance if you buy a house, receive an inheritance or take a leave from work.   

How often should a financial plan be updated?

            When a financial plan is produced with your advisory team, it should be comprehensive and enduring. However, if there is a significant change to any of the major assumptions that form the foundation of the plan, then you should update it. The plan should be an integral part of an annual review with your advisor and its accuracy and reliability should be assessed as part of that process.

If you have no major life changes, the plan might “drift” to the point that an update or refresh is advisable. On the flip side, if you are constantly changing your plan, it will lose its value as a benchmark because you are frequently moving the goalposts.

Financial Planning with Forge Advisory Group.

At Forge Advisory Group, we consider planning to be a very important aspect of your overall wealth management needs. In partnership with you, and our CIBC experts, we develop and integrate a financial plan to help ensure everyone is aware and committed to your stated goals, and the path to achieving them.

You are the ultimate beneficiary of the Plan, and our role is to help and empower you to achieve your wealth ambitions.

Reach out to us @mailbox.forgeadvisorygroup@cibc.com schedule a consultation to start developing your personalized financial plan.

If you have any further questions, please let us know.