Getting Financially Organized in Under 6 Months – Part 4: Have a financial plan

Getting Financially Organized in Under 6 MonthsOne of my heroes, Coach John Wooden of the UCLA Bruins, used to say, “failing to plan is planning to fail.” He was well known for creating meticulous plans for everything he and his team did. His staff spent hours preparing for each practice to ensure they got every minute’s worth out of them. This is one of the many reasons why he won 10 NCAA basketball championships!

I’m not suggesting you should plan as thoroughly as John Wooden, but it wouldn’t hurt to keep his methodology in mind.

Now that you know what your financial goals are, it’s time to figure out how to achieve them. For many people this is the most challenging part of getting financially organized. There are literally dozens of strategies you can use to reach your goals! We’re interested in a financial plan that is very efficient and tailored to your needs.

The following steps will help you understand the various parts to every good plan:

1)  Gather details of your existing financial situation

The second blog in this series on gathering important information will give you the details you’ll need


2)  Set financial goals that are important to you and your family

See the previous blog in this series on goal setting


3)  Outline a tailored strategy to accomplish your goals

The basis of every good plan is to have strategies to achieve the goals that are important to you and your family. This should include:

  • Investment strategies (based on your risk tolerance and goals)
  • Investment return assumptions
  • Contribution recommendations (to various accounts and investments)
  • Spending allocations (if retired and living off of your funds)
  • Risk management
  • Tax planning
  • A comparison to your current strategy — it is helpful to have some context in terms of how you will change your current strategy.


4)  Write out projections to verify the strategy will achieve your goals

For example, if you’d like to retire at 60 with an income of $150,000 in today’s dollars (factoring in inflation) and you expect to live to age 85, you should:

  • Confirm that your money won’t run out at age 82. This is vitally important. Your projection should be conservative to protect against an unforeseen situation. Using graphs is often the best to display the results as they are easy to follow and give a clear picture of the rate of change in your net worth.


5)  Follow action steps required to execute your plan

The best plans are often wasted because the strategy was not followed through. Life is busy and it can be easy to forget to get something done or follow up on an important recommendation.

We provide our clients with a simple checklist so they know what is required to execute the plan. Examples of what this would look like may include the following:

  • Update your will and power of attorney by a certain date
  • Amend corporate structure (as per recommended strategy) to maximize income splitting
  • Maximize RESP contributions through monthly contributions
  • Maximize TFSA contributions through a lump sum contribution


6)  Have a concise document that is easy to understand

Years ago we provided clients with plans 50 – 60 pages long. We assumed they would appreciate as much detail as possible. Unfortunately, we didn’t realize our clients would find pages upon pages of numbers overwhelming.

Today we provide our clients with an executive summary that is easy to understand and follow. However, some clients still like to see all the numbers behind the plan, which we are happy to provide.


As you can see, there are many detailed parts to a plan that can be very difficult to do on your own. I recommend working with a professional that can guide you through this complicated process. When choosing someone to work with, make sure he/she has a detailed process that not only works, but works for you.

In my next post I’ll cover the important step of making sure your plan is actually carried through!!