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What Is A Financial Plan & Why Do I Need One?

Updated: Jun 15, 2022

“Good fortune is what happens when opportunity meets with planning.” - Thomas Edison

Generally speaking, a financial plan is a set of instructions for your future that’s specific about how to best manage your finances and prepare for potential costs and issues that may arise.

There are many aspects involved with financial planning, including tax-planning, savings, retirement, estate planning, insurance, and more. It’s not uncommon for people to combine their financial plan with an investment plan, as investing is often part of what will help you save for the future.

This article takes a look at the elements involved in creating a complete financial plan and why working with a professional is essential for your long-term bottom-line. Continue reading to learn more.

Cover photo for article called What is Financial Planning. Text says: What is financial planning - learn why working with a professional can make all the difference to your bottom-line

What is a financial plan?

A complete financial plan identifies, organizes, and prioritizes your financial goals and then outlines the best way to reach them. The process involves meeting with Ken and taking a thorough look at your current financial situation. Once he has a practical understanding of where you're starting and what you hope to achieve in the future, he can make recommendations and show you how to best implement them.

Rather than focusing on a single aspect of your finances, we see our clients as real people who have a variety of goals and responsibilities. Because of that, Ken works to address a number of financial realities to best help you make the most of your life. With his insight, he can look ahead to see if you’re on the right track to meet your goals or if it would be helpful to make adjustments to your current spending habits.

Financial plans can take place over years, months, or decades, depending on the timeline for your goals. By taking one step at a time, such as reaching your monthly savings goal or consistently investing a portion of your monthly earnings, your financial plan can prepare you for the future while offering you peace of mind for today.

Testimonial graphic with the text: As a new investor, I made an appointment with Ken because I wanted advice on how to take care of my finances going forward in my 30's. I was welcomed into an extremely friendly atmosphere and I love that Pauline has an office dog (Hi Pip!). While retirement is still some time away for me, I feel confident in my financial plan and know I'll be ready when the time comes.

When is time to get a financial plan?

At some point, everyone needs to develop a long-term financial plan that includes considerations for retirement, paying off your house, funding post-secondary education for your children (if you have them), and estate planning.

Oftentimes, we see people seeking financial advice when they find themselves in one or more of the following scenarios:

  • Getting ready to retire and wanting to ensure they’re on the right track

  • Recently inherited money from a parent and looking for advice on how to invest it

  • Newly married and looking for help managing finances as a couple

  • Going through a divorce and looking for advice to move forward financially as a single person

  • Children of aging parents who need help managing their general finances

  • Not a fan of investing and financial planning, but seeking professional help

  • Interested in financial planning and investing, but looking for a second opinion on how to improve

With all of the free information out there on the internet and in books, you may be wondering if you really need to meet with a financial advisor.

The following questions can offer a bit of direction:

  • Do you have a wide knowledge of investments?

  • How much do you enjoy reading about wealth management or other financial topics, including researching specific assets?

  • Do you have expertise in financial products? Do you have the knowledge and time to monitor, evaluate, and make periodic changes to your portfolio?

While you may be up for the challenge of doing your own research, to do it right, it will cost you a lot of time to stay current. From all of the investing and insurance regulations to changes in tax laws or other legislation that could affect your finances, there can be a lot to keep up with.

In addition, a DIY financial plan leaves you at risk for making decisions based on your emotions. Finances and emotions never mix well. Working with Ken gives you the advantage of having an unbiased professional to check in with from if you are ever confused or emotional when it comes to wealth management. Add in the fact that most people find it difficult to see far enough into the future to imagine, much less plan for retirement; professional advice can be very handy.

Furthermore, with a financial plan from Thom & Associates, you’ll have a better understanding of your personal finances as well as actionable steps or a road map to follow to reach your goals.

Testimonial graphic with the text: A few years ago, my husband and I were stressed and worried about whether or not we would have enough money saved for a comfortable retirement. That's when we booked in for a consultation with Ken. We told him about our situation and he gave us a plan to follow. Now, thanks to his advice, we've been able to easily transition into retirement and know that we have enough to support ourselves and our family as needed.

What are the essential components of a financial plan?

We set out to create an extensive and personalized financial plan for you and your family to ensure it’s as effective as possible. In order to do this properly, the first step is to meet with Ken to discuss multiple aspects that involve your financial life, such as your tax returns, retirement accounts, and existing investments.

While no two financial plans are the same, the good ones tend to focus on similar concepts. Meet with Ken to explore your financial goals and figure out ways to make them achievable. Depending on your unique circumstances, he can make recommendations about a variety of subjects including retirement, long-term investments, setting up an education fund for your children, and tax-friendly strategies to ensure you live comfortably for the rest of your life.

While there may be short-term changes to make, your personal plan will help ensure a smooth transition through life’s financial phases. In Ken's 27+ years of experience, these are the elements that are addressed most often and should be revised as necessary:

  • Retirement strategy: No matter what your short-term priorities are, your plan should include a strategy for growing the retirement income that you’ll eventually rely on.

  • Comprehensive risk management plan: This includes a review of life and long-term care insurance.

  • Long-term investment plan: A custom plan based on specific investment objectives and a personal risk tolerance profile.

  • Tax reduction strategy: A strategy for minimizing taxes on personal income to the extent allowed by the CRA.

  • Estate plan: Arrangements to maximize the benefit and protection of your heirs in addition to guidance for your executor when the time comes.

The table below takes a more in-depth look at the services we can cover as your financial planner. If you have questions about any of these or would like to get started, send us a message today.

Parts of a Financial Plan


  • Needs assessment

  • Financial goal setting

  • Advice and action points on how to reach your financial goals

  • Post secondary funding planning


  • Investing and asset allocation strategies

  • Investment portfolio reviews

  • Overview of retirement account investments

Retirement Planning

  • Registered Retirement Savings Plan

  • Group pension plans

  • Ways to grow your and protect your savings

    • Segregated funds

  • Post-retirement lifestyle plan

Estate Planning

  • Estate/inheritance tax estimates

  • Philanthropic gift planning

  • Guidance for your executor when the time comes.

Tax Planning

  • RRSP and TFSA contribution plan

  • Capital gains and income tax returns

​​Risk Management

  • Life insurance

  • Long term care insurance

  • Beneficiary and survivor benefit plan

At Thom & Associates, we offer a variety of services, many of which go hand-in-hand. This means we can create an expansive plan that considers all aspects of your current situation and future aspirations. Get in touch today.

Working with a professional gets you results

Creating a financial plan that takes you from your current situation into retirement is an exceptionally detailed process. There are many scenarios to think about and potential loose ends to consider.

At Thom & Associates, you’ll receive not only an overarching gauge of your overall situation, but also extensive advice to help you meet your goals. Ken will be your partner in piloting your finances through every stage of life. Once your plan is designed and the necessary steps to put your plan into action have been taken, you can meet for reviews as frequently (or infrequently) as you like to monitor and adapt your plan as your life changes.

☎️ Call 250-861-7777 to make an appointment today.


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