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Why you need a financial plan

We all have goals. Whether career, life or family, there’s usually something that each and every one of us envisions for ourselves. Owning our own home, being our own boss, or retiring somewhere warm—where there’s no snow, amirite?

When it comes to financial goals, achieving them is usually easier said than done. Enter the financial plan. A financial plan is your personal roadmap to financial security and, eventually, financial independence. Think about it like a business plan: In order to succeed in business projects, companies will lay out a business plan to help them bring their projects to fruition and ensure their business sustainability. Financial plans act the same way as a business plan in that they will guide you at every step of your financial life.

Here are some of the benefits of having a plan for your financial goals.

  • Build a better, more secure future for yourself

With a financial plan in place, you’ll have a better understanding of your spending habits compared to your income. This will help you track your expenses and increase your net savings every month. 

  • Have enough for an emergency

A good financial plan should include an emergency fund that will help you cover any unexpected expenses or support you in case of an income loss. It’s usually recommended to have 3-6 months of your living expenses in your emergency fund.

  • Prepare for retirement

Your financial plan should not only include your short-term goals like saving for a trip or a car, but also your long-term goals like saving for retirement. 

It may seem tedious and—let’s face it, no fun at all—to start saving for your retirement when you’re young. However, the sooner you start saving , the better prepared you’ll be for a comfortable retirement. Your older self will thank you.

The road to financial independence

Imagine waking up every morning and being able to choose how you want to spend your time: do you want to work today or do you want to take advantage of the beautiful sunny day to go for a walk or hike instead?

This is exactly what financial independence is all about: having the choice to work or not.

Being financially independent means having saved enough money to cover your essential and leisure expenses. You no longer need to go to the office to pay your bills.

Since everyone’s situation is different, we recommend you meet with a financial planner to figure out what’s needed for you to achieve financial independence.

Unfortunately, there’s no blueprint to reach this goal: your financial situation and essential and leisure expenses may be different from those of your neighbour.

An expert can also help you establish a savings and investment plan to achieve financial independence in the most efficient way.