The first step is to take stock of where you are today. You need to know where you are today so you can set goals for the future.
You will need:
- Copies of all papers that relate to your financial situation. This includes your household budget, savings, debts, assets (such as your home), taxes and insurance. Tip: Can’t find your receipts and records easily? Start a filing system now so you can find this information easily next time you need it.
- A calculator.
- A place to capture your current numbers, such as this Investment Planning worksheet.
What you need to know:
- What you own. This includes big items like your home, car or boat, savings and investments). You’ll find this information in bank and investment statements, retirement savings and other pension papers, and your will.
- What you owe. This includes student loans, mortgage, car loan, boat loan, credit cards, and other bills. Look for your mortgage records, loan papers and credit card bills.
- What you make. This includes your pay and other income. Look at your tax returns and pay stubs.
- What you spend. This includes basics like food, clothing, utilities, and car costs, as well as extra expenses like eating out, going out, insurance, health or dental bills, and money you donate. Look at your bills, receipts and credit card statements.
Questions to ask:
- How much have I saved so far?
- Do I have an emergency fund?
- What assets do I own? (examples: car, home, cottage)
- How much do I owe on my credit cards?
- What other loans do I have?
- How much income tax do I pay each year?
- What insurance do I have in case things go wrong? (life, car, home, health, disability, critical illness)
Remember: Don’t try to make a plan without the right information. Set aside some time to gather all of your records. If you have an adviser, you will need to share all this information with them.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.