An Annual Financial Checkup is Critical

Whether you’ve just found a financial planner or you’ve had one for years, an annual financial checkup is critical. Like anything else in life, maintaining your financial health requires some attention.

You get regular checkups with your doctor and your dentist, after all. You drive your car to the mechanic for a tune-up, and you take your pet to the vet once a year. All of this ensures you’re taking care of things that matter most to you, so why not take the same approach with your money?

It’s equally important to assess your finances on an annual basis and make sure you’re on the right path to meeting your financial life goals. Just as your doctor can help you devise a plan to improve your health, a professional financial planner can help you tackle any money aches and pains you may face and set you on a path to success.

Confidence When Using A Financial Planner

 The FP Canada™ Cross-Country Checkup survey found that Canadians who work with a financial planner feel much more confident when it comes to money matters. Of the 57% of Canadians who believe they’ll achieve their financial life goals, nearly three quarters (71%) say they have a plan in place.

 The new year is a good time to put pen to paper and start to put together your plan.

If you already use a financial planner, heed their call to sit down early in the new year to revisit and tweak your plan if necessary. If you’re just getting started, set up your first meeting with your planner, most likely via video conference until the pandemic has passed. Regardless of whether it’s your first time or an annual sit-down, expect to take a pulse on your fiscal health.

“Finances can be an enormous source of stress for many Canadians, particularly after the challenging year we’ve just had dealing with the enduring COVID-19 pandemic. This year more than any other year, it’s critical to meet with your financial planner, or reach out to one if you don’t already use a planner,” says Gillian Lee, a Certified Financial Planner® professional in Yellowknife.

As 2021 gets under way, here are some tips to plan for your financial checkup, according to Lee:

  • Prepare a synopsis of life changes, like a change in employment, a new baby or a new home, over the previous 12 months

  • Compile a list of questions for your planner

  • Gather relevant documents, including year-end pay slips, tax returns and insurance policies

  • Show your planner any existing budget you’re following, and assess how your spending habits have changed over the past year and where there might be trouble spots

  • Have a list of short-term and longer-term goals you’d like to reach

Doing all this will ensure your financial planner has a clear understanding of your current personal circumstances that could require tweaking your financial goals. It will also enable him or her to give you the best possible advice on how to amend your plan and prepare for the year ahead.

What to Expect at the Meeting? 

“Your financial planner will assess your financial health and, if necessary, recommend adjustments to help you achieve both short- and long-term objectives,” says Al Nagy, a Certified Financial Planner professional in Edmonton. 

“She’ll assess whether a change in salary, to name just one example, will affect your plans. Changes in your financial and life goals or adjustments to your future plans, such as planned retirement age or estate planning, could require alterations to your plan.”  Expect to answer questions on how you manage money, including your saving habits, and anticipate some homework as you and your financial planner create a roadmap of where you are now in terms of your finances and where you’d like to be in the future. 

Nagy says meeting more than once a year could be necessary if you’re undergoing some major life changes. 

“A new baby or a new home, increased insurance needs or any other life events that could impact your financial plan should be reviewed with your financial planner as they happen,” he points out. “That way the plan can be adapted as soon as possible to your changed circumstances.”

Don’t Be Intimidated 

If you’ve never sat down with a financial planner before, it might feel intimidating, but knowing what to expect can ease your anxiety.  

A professional financial planner is a qualified professional, ready to partner with you over the long haul and work with you to meet your financial goals. They are go-to experts who know how to help you stay on top of your finances — so you can achieve your dreams.

Resources:

N/A. ( N.A). An Annual Financial Checkup is Critical. FP Canada. https://www.financialplanningforcanadians.ca/financial-planning/annual-financial-checkup-is-critical

Kristen Fazio