Many people start off a new year with goals. For some they may be personal or professional. Others may be financial goals. Did you know that a Financial Planner can help you to achieve all these goals? Setting up a financial plan is never just about the numbers, but rather a plan that encompasses you as a whole person. You must first know where you want to go and what you want to accomplish so that you can partner with your planner to help make your goals into a reality.
When creating a financial plan, some categories to consider can be housing and recreation.
Housing is also a key area of a financial plan. Do you plan to buy a new home, upgrade your current home or downsize? Housing costs change over a lifetime, so it is important to have a plan that reflects this.
Recreation can be defined as how you spend your free time. A great planning question is to think about how would you like to spend your free time in the future? Do you want to have a cottage? Is travel important to you?
When looking at your planning for 2019, is a home upgrade in your future? IT is helpful to know what the increased cost of that upgrade is likely to be in order to best achieve this goal. One of the most common questions we get when working on a financial plan is, I want to buy a larger home but I don’t know how much I can afford. A helpful hint to answer this question is to practice. If you are renting or own a home currently, determine how much that is currently costing you. Then look at what the cost of the upgraded home would be. Sometimes looking on a real estate site and finding a home you would want to live in and then using that cost is helpful. Then pretend that you are living in this home for a few months. Set an auto savings amount from your bank account that comes out the same day as your mortgage payments. If you are able to handle this additional amount each month then you know that upgrading at this level is affordable. If you are renting currently, don’t forget to add in the potential additional cost of property taxes, as well as your mortgage payment.
The next area of goal planning is recreation. If you attended the January 2019 CAWEE breakfast you heard Corey McCusker speak about the value of visualization. Most people have an idea of what their ideal recreation pursuit looks like. It could be having a family cottage or retiring to a place with a warmer winter climate. Whatever your recreational goal, there could be merit to starting to work towards the goal sooner than later. If it is a cottage, think of all those extra years of enjoyment you could gain from an earlier purchase. You could rent it out part of the time to help cover the cost. Having whatever your pursuit is paid off before retirement takes pressure off your retirement income planning. You would no longer have mortgage payments. If you are thinking of a place in a warmer client you could consider buying it now and renting it out and allowing someone else to pay down your mortgage until you are ready to enjoy the property yourself.
Whatever your goals are for 2019, write them down, make sure your financial plan is directing you in path the achieving them. Practice when you are not sure what you can afford and think about how the recreational goal you have for the future can be worked towards today. Happy 2019!
Dana Mitchell, B.Comm, CFP, CLU, CHS
Certified Financial Planner
416-552-3004 ext 4
Dana seems to capture and demonstrate what many believe the next generation of business leaders will be: smart, compassionate, focused and fun. She’s a seasoned wealth planner and is attentive to the long-term implications of the advice we give clients.
She’s been taking on the leadership of the firm from her father, Ed, over the past few years and brings vibrancy and fresh approaches to the business. She’s a mom, a wife, a business leader, and a well-respected professional in the financial services industry. When you meet her, you’ll glimpse all of that, but mostly you’ll see someone who is skilled, caring and brings smart planning to professional families.