The Art of Personal Financial Planning

The fact is that when it comes to finances, I havewere no financial genius', but they must have learned a
nothing to hide. My lack of financial knowledge hadfew things in their 64 years and they have retired quite
really hit me for the first time a few years ago, shortlywealthy. It seemed a good place to start.
after the birth of my daughter. I realized I wasI can't believe that my parents and I never "really"
responsible for another life. It wasn't like I wasn't giventalked about money before. The only thing I was told
good role models - my parents have done well! I felt Iwas "cash was king" and to never borrow money. My
was doing ok. It was only until I was reading a businessparents were very frugal with their money, and I was
publication when I stumbled across "Self-Analysisalways told to work for things and save, save, save.
Financial Planning Test." No sweat I thought.My mother had taken responsibility for educating
Confidently, I picked up my pencil and set aboutherself financially because she was never taught
responding to questions such as:about investing or financial planning by my
- Have you selected the proper amortization period forgrandparents. But here I was 35 and felt like I was
your mortgage?uneducated and blamed the education system in part
- Is you will up-to-date?for my ignorance. How could I know calculus and not
- Could your dependents live comfortably in the eventknow how to do my own taxes.
of your death?It is inconceivable that our government has not altered
- If you plan to retire early, have you set up a suitablethe school curriculum to include a basic family finance
savings program?course. All high school graduates should know how to
- How do you plan to pay for your children'sfill out an income tax form properly. They should know
education?how to select their mortgage, how to finance their
- Fifty percent of Canadians retire in financial hardship.child's education, and how to save and plan for
What are you doing to guarantee you won't be one ofretirement. We now live in a society that demands
them?instant gratification, which is part of the problem.
- Are you debts structured properly?I am not sure that politicians understand the
Not only could I not give a satisfactory answer totremendous benefits the economy would enjoy if the
many of the questions, but also I didn't evenaverage family knew how to handle their money
understand some of them. I caught an ominous glimpseproperly. Most North Americans are financially illiterate.
of my husband and daughter living on the streets.There is no excuse for our possessing the little
I dropped my pencil, an unnerved woman. It's not that Ifinancial knowledge we do. When a university
want to be a multimillionaire, though like everyone else, Ieducated person like me is embarrassed by an
do. I'll settle for comfortable - very comfortable. I enjoyelementary financial test, something is wrong.
living in a nice home, owing a yacht (our floatingSo I embarked on a journey of discovery. Most
cottage), driving nice vehicles and contributing annuallyfinancial books concentrate on investment alternatives,
to an RESP and RRSP for my daughter and myself,not on mundane topics such as saving, buying a house,
respectively. However also recognized that I wouldand insurance - the common person's concerns. They
probably be one of the millions of people who wouldall showed you what to do with money once you had
be forced to work into their 70's. I wanted the ability toit, but they didn't tell you how to accumulate it. I was
have all of those luxuries, but not compromise myassured that a 7 year university career and full time
thoughts of an early retirement. I think these are goalspermanent job with benefits was the way to go and
that are shared by most North Americans. Are theyto save a percentage of my earnings for RRSP's.
realistic? Can they be realized on an average salary?But....
If so, how?The best advice that I ever received was "if you want
Within an hour of reading that article, I was committedto learn to do something right, watch someone who
to learning the basics of financial planning. I had nodoes it successfully. It is also true for financial planning.
desire to learn the intricacies of the stock market, norNow we have more financial education available for
was it my goal to be able to recite the mortgagepeople, as a direct response to the economic
tables from memory.difficulties many are facing. Those who educate
All I wanted to know was how best to get where Ithemselves are the ones who will retire sooner than
want to be from where I am now. I figured my parentslater and will have achieved their financial goals.