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Seven Steps to an Organized Financial Life


Summer is here. Daylight stretches late into the evening and the daily grind loosens up as business slows down to let everyone soak up the sun.

Given the slower pace life seems to take over the next two months, it’s a good time for people to take a look at their finances and make sure they’re on track with their goals.

If financial organization has been a struggle for you throughout the year, now’s a good time to take another stab at it. Here’s a list of seven steps towards an organized financial life.

Step 1 - Make the decision

Choose to be organized and make it a priority. When people turn a should into a must, they’re more likely to follow through.

Step 2 - Have all the information

An individual who is potentially financially organized needs to assess where he/she stands. This includes knowing his/her monthly expenses, income, and overall net worth in order to produce a personal balance sheet, a cash flow statement, and any insurance coverage.

Some apps to consider downloading include www.mint.com and myFinanceTracker, which can help create balance sheets, track monthly budgets, and send reminders when bills are due.

Step 3 - Outline goals

Goal setting is an important strategy, as long as you create goals that are important to you and your family. Create a timeline in which to achieve these goals. Include short-term goals of one to three years; medium-term goals of three to six years; and long-term goals of over six years.

Step 4 - Have a financial plan

Outline a tailored plan in which to accomplish the goals set out in Step 3. This includes where to invest (stocks, bonds, mutual funds); how much to invest; and when to invest. Decide the percentage of the return to be re-invested and the percentage to be saved.

A coherent financial plan also means projections and action steps to ensure each goal is achieved. This is where a concise document comes in handy, such as a spreadsheet or checklist to monitor progress. At Raymond James, clients are provided with an executive summary that’s easy to understand and follow.

Step 5 - Get leverage

Identify areas of struggle and figure out a way to get maximum leverage by assigning “penalties”. This could be a promise to do every family member’s chores if the budget falls by the wayside, or giving up meat if the Will doesn’t get updated. It’s surprising how much can be achieved when this strategy is in place!

Step 6 - Revisit and reset

Financial plans must be constantly revisited and updated on a regular basis, even if nothing changes. However, it’s more likely the things that can change — net worth, health, family situation, taxes, and life goals — will change.

Step 7 - Find a financial advisor

Working with a qualified financial advisor will help ensure you follow through. A professional can help a struggling individual get started or walk you through each step of the process.

When looking for an advisor, there are a few things to consider. Listed in more detail here, they include: good chemistry; good service; finding someone who cares; and someone who has the right accreditation. It also means taking into consideration the financial services company the advisor is with, and its ability to provide the advisor with strong resources.

Financial organization should be a priority, regardless of age or income. The sooner you start the journey, the easier it becomes!

Matthew Lekushoff is a certified investment management analyst (CIMA), one of less than 200 Canadian advisors with that accreditation. He has been a financial advisor for 17 years, working at Raymond James Ltd.’s flagship Toronto office, The 53rd, since 2008. For more detail on financial organization, see his seven-part series, or to sign up for his newsletter, visit Here.