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What is a financial plan, exactly?

By: Nadia Stefyn

Published On: November 19, 2014

Put simply, a financial plan takes your short and long-term goals and uses your current and future financial state to help you achieve them.

As with any other plan, a financial one keeps you focused by saving the money you need to realize your goals (eye on the prize!), protect what is most important to you, plan for retirement and manage your taxes.

A financial plan should contain the following:

  • A summary of your financial position
  • A list of your short and long-term goals
  • A guide to how you will reach these goals
  • Explanation of how chosen investments will work within your strategy
  • Disclosure of risks and how they can be managed or overcome
  • List of all the costs

It is possible to create your own financial plan, but the knowledge and expertise of a qualified professional could get you where you want to go faster. If you're not ready to see a planner, start small by setting financial priorities each month, paying your bills on time, staying out of debt, and putting away a few dollars wherever you can.

This Forbes article covers the Four Essential Pillars of a Financial Plan and you can find plenty of relevant information on the FPSC website.


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