A checklist to reach your goals

Have you discussed your goals with a financial advisor?   You should because the advisor relationship should focus on more than just investments.

Communicating goals with your financial advisor is essential as it helps to establish recommended savings levels and investment suitability.  Every person has a different set of goals and priorities.

If you have never formally written these on paper, then below we have a few steps to help:  .

Step 1 – Create a list of goals, using these examples as a guideline:

  • Reducing portfolio risk
  • Enhancing portfolio returns
  • Ensuring adequate insurance for family
  • Minimizing taxes
  • Planning for child or grandchild’s post secondary education
  • Creating a financial plan
  • Better management of cash flows
  • Buying a home
  • Increasing annual income (i.e. new job, working more)
  • Balancing work and leisure (i.e. working less or smarter)
  • Saving for a major purchase (i.e. boat, vehicle, home renovation)
  • Creating liquidity
  • Managing and paying down debt
  • Not worrying about money
  • Establishing an emergency reserve
  • Retirement savings
  • Retiring comfortably
  • Helping family or community
  • Planned donation strategies
  • Maximizing the value of your estate
  • Selling or buying a business

In order for this exercise to be valuable, your goals must be realistic.  This list should focus primarily on those items requiring financial resources.

Step 2 – It is nearly impossible to work on all of your goals at once.  From the list you create, rank each goal in order, from most to least important.  Beside each goal, write any comments that you feel are important in helping your advisor understand your total situation.  The second step can often be a more difficult exercise for many.

Step 3 – Most of your financial goals should be measurable.  By putting specific dollar amounts on your goals you will be able to monitor your progress.  As an example, if your goal is to be mortgage free in five years then your plan may involve setting aside the funds necessary to make extra principal payments each year.

Step 4 –What is your most urgent concern regarding your financial affairs?   From the list above, you should break your goals into short term (1 to 5 years), medium term (6 to 10 years), and long term (more than 10 years).   Depending on your time horizon, short term for you may be 1–2 years, medium term 3-5, and long term may be greater than 5 years.

Step 5 – Once the above steps are completed you should have a clearer understanding of your goals.  Are your goals reasonable?  It is now time to share the work completed above with your advisor, provided he/she provides financial planning advice.  Those advisors who do, should be in a position to comment regarding your goals.  The more “goals” you have the more important it is to create a financial plan.  Whether you have a formal plan or verbal discussions, we recommend outlining specific “actionable” steps.

Step 6 – Updating and monitoring your goals.  You should review the progress you are making towards your financial goals at least annually.  Keep in mind that your goals will be in various stages of development in the future, and that significant life events can often impact your financial goals.   It is important to make your plan flexible and open to change.

We feel that completing this process will mean that you have started immediate action.  This will make your goals more real to you, and increase the likelihood of them being reached.