6 Ways to Balance your Financial Priorities

"I should save for retirement. The kids need a university education. And we all deserve a vacation this year.” Does this sound like you?

Many of us are struggling with conflicting financial priorities. According to research commissioned by FP Canada’s international body, the Financial Planning Standards Board, in partnership with FP Canada, our most common priority is building a savings or emergency fund, followed by being free of major financial debt, being prepared for a financial emergency, and being free of consumer debt like credit cards.

But how can you juggle a seemingly endless list of things you need or want—both today and in the future? How do you know what you can afford to do now while still taking care of your future self? And how can a financial planner help you with this delicate balancing act?

“It’s up to you to decide what priorities are important for your current and future lifestyle,” says Doug Lamb, a Toronto-based Certified Financial Planner® professional with HollisWealth Advisory Services Inc. “You might want to go from full-time to part-time work, take two trips a year or retire at 55.”

“Once you know what you want, a good financial planner can paint a picture of the scenarios you’ve created,” he says. “What’s the end result? What are the potential issues? How can you pursue your financial and life goals today so that your money lasts through retirement?”

A planner won’t tell you what to do, Doug says, but will help you understand your true situation by illustrating the financial implications of your wants and needs. Then it’s up to you to make the decisions.

When all is said and done, it comes down to the plan, according to Doug. “You won’t be in a position to tackle conflicting priorities without a financial plan to take everything into account at once,” he says. “Be willing to commit to the process by working with a financial planner who will explain your options and help you progress toward all of your goals.”

Keep these things in mind as you consider your own financial priorities:

  • Weigh the trade-offs: Know what’s important to you—and where you have flexibility. For example, you may feel that a semi-annual vacation is a must for your mental health, but you’re willing to brown bag your lunch every day.
  • Don’t wait: Don’t put off taking a good look at your financial priorities. If you need to make changes, it’s better to find out now so that you have time to take action.
  • Clarity is key: Be crystal clear in communicating your goals to your planner and ask questions to make sure you’re on the same page about how you’re going to reach them.
  • Think long-term: Live for today—but don’t forget about the future. You don’t want to be financially compromised later in life because of choices you make now.
  • Reassess regularly: Revisit your priorities—and your plan—at least once a year to be sure you’re on track.
  • Stay the course: Commit to your plan and trust that you’re getting ever closer to the lifestyle you want.
6 Ways to Balance your Financial Priorities article published by Financial Planning for Canadians: www.financialplanningforcanadians.ca/financial-planning/6-ways-balance-financial-priorities

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