Perfect time to reflect on priorities, renew your financial plan
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Hey there, time traveller!
This article was published 04/09/2021 (568 days ago), so information in it may no longer be current.
As we enter September, a traditional time of reflection, renewal, and fresh starts, it’s a good time to spend some quality time deciding what’s most important to you in your life, writing down those priorities, getting specific about those goals and then designing a financial plan to reach each one.
OK, there may actually be a few choices and trade-offs that have to be made along the way and possibly even a few sacrifices.
But after the last 18 months, aren’t we all used to that?
What makes this September special as a “new year” and launching pad for the rest of your life is that everything has truly been different. In a normal year, we would have had a nice summer, had some relaxing days, and now it’s time to get back to work or back to school.
This year, it’s a whole new start (hopefully) as every person has gone through things they’ve never experienced before, over the last year and a half.
And while things show no immediate sign of returning to “normal,” the pandemic has given us all an opportunity to do some reflection and re-evaluation. Everyone I know has thought about their priorities, looked at the things they thought they valued before the shutdown and the things they found were actually most precious to them, when the usual items were swept away.
To repeat, this is the essence of true financial planning. Decide what’s most important to you and what you want to achieve in your life, first. That compelling vision of your future is what should drive your choices, your priorities, and your resulting financial plan.
Your financial plan is your servant, not your master. It’s simply the method and process through which you provide yourself with the resources for the material things (or the travel, or the donations, or the family assistance) that are truly important to you.
For many people, another great opportunity right now has been afforded by the inability to spend money on things that used to keep the coffers empty or rack up credit card debt. In 2020 and the early part of 2021, Canadians paid down some $16 billion of credit card debt that had been increasing steadily up till that point.
We also went from a negative savings rate to as high as 20 per cent of income in the early part of the pandemic. Many people who didn’t have savings for years now have healthy bank balances.
Those factors have given many folks the resources to fund priorities like future financial security (by topping up TFSAs and RRSPs), paying off high-interest debt, and generally giving themselves some breathing room not previously available.
Please, take advantage of this time (and those resources) to really think about where you want to go from here. Then write down your priorities and develop a plan to get there.
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, CIM is recipient of the FP Canada™ Fellow (FCFP) Distinction, and repeatedly named a Top 50 Financial Advisor in Canada. He is a Portfolio Manager and Senior Vice President with Christianson Wealth Advisors at National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.
Personal finance columnist
David has been a practising financial planner and life advisor since 1982, specializing in helping clients identify and reach their most important goals, and then helping them manage all of their financial affairs, including investments.