2Financial Literacy Month was officially launched by Minister of State (Finance) Ted Menzies. As well, Financial Planning Week is Nov. 19 to 25, with several initiatives underway by the Financial Planning Standards Council (FPSC).
Planning your financial and person life just makes sense, right? Surveys show most Canadians agree planning is good but, curiously, many of those same people do not prepare a financial plan. Why not?
The FPSC recently surveyed certified financial planners to ask them what they hear from people and the reasons people give for not making proactive financial planning a part of their lives. In addition to the old standby, "I'm too busy," here are the top myths identified:
1. I thought financial planning was only about investing or retirement.
2. I didn't understand the value that planning can have for my life.
3. I have plenty of time, so I can put it off.
4. I didn't realize financial planning was about my life goals, not just numbers.
5. I thought I had to be wealthy to have a financial plan or to do planning.
6. I thought opening up an RRSP was a financial plan.
All of these statements are myths. I have heard all of them for years, but especially lately, when I talk to people about my new book on personal financial planning, Managing the Bull.
-- "Wait till I get some money -- then I'll read the book."
-- "I don't have any extra money to invest."
-- "I already have a system for investing."
All of those myths and comments seem to be saying the equivalent of, "I don't need to learn to read yet, because I don't have a library of books." How much sense would that make?
Financial planning is about goal-setting and life-visioning, with the addition of a systematic, well-thought out financial plan to get you from where you are now -- even if you are broke and in debt -- to where you want to be.
It seems obvious that financial planning is even more critical for people with limited means and significant financial challenges than for the wealthy, doesn't it?
The wealthy may have bigger opportunities, but they are more likely to be able to reach their goals without planning. For those of us of modest means, we have to set priorities and make choices. That's one of the most powerful things about a proper financial plan -- it helps you make the choices that are right for you, not for somebody else.
Over the last 30 years, I have helped more than 2,300 people with their financial planning. Many of these were in a limited way when people were faced with a financial decision or crisis. Others have been an ongoing comprehensive engagement, preparing a full financial plan and then monitoring it permanently, as we do in our practice now.
Over that time, I can only remember a handful of people who did not find the process enlightening, liberating and beneficial. Most found it reassuring, energizing and empowering. All found it helpful in making decisions.
The process of planning moved all of these people closer to their personal and life goals. Execution of the plan actually got them where they wanted to go.
Now that's worth a few hours of "work", isn't it? (Especially when there's no NHL hockey and no meaningful football available.)
By the way, if you want a copy of my new book, you can order it from the Free Press by phoning (204) 697-7377 or at www.winnipegfreepress.com/store/managing-the-bull.
And plan your way to prosperity.
Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.David Christianson, BA, CFP, R.F.P., TEP, is a financial planner and adviser.