G2G Impact Planning Foundations: Planning For Your Future

Jordan Sheiner
November 28, 2018

Despite an abundance of tempting short-term purchases, such as a newer, larger apartment, a better car or that next international vacation, millennials are also increasingly thinking about the long-term, even if they’re not sure how to get there.

Welcome to Part I of our four-part series about some of the strategies you can use to achieve your financial goals—both today and in the future.

Millennial this, millennial that. News outlets love to cover them, and brands have struggled to understand them, but the fact remains that millennials are finally starting to come into their own. In fact, millennials are now the largest generation in the U.S. labor force, and as a result we're starting to see a shift in spending habits, of which much has already been written.

Yet despite an abundance of tempting short-term purchases, such as a newer, larger apartment, a better car or that next international vacation, millennials are also increasingly thinking about the long-term, even if they’re not sure how to get there.

So, if you consider yourself a part of that group, what's next? Furthering your education, buying a home or starting your own business are all worthwhile pursuits, but there is a common thread: it’s going to take more than a few weeks (and a few paychecks) to achieve them. With that in mind, you may have also realized the value of planning out the steps you need to take in order to reach these goals. In other words, you may be considering a financial plan.

A Plan Is (But Really Is Not) a Four-Letter Word

Developing a financial plan is not a difficult task. Some basic budgeting skills, a few practical tools and some imagination are all you need to build a basic roadmap for achieving your future goals. Similar to any roadmap, a financial plan will also include some key landmarks along the way that will help keep you moving in the right direction. In this series, we’ll examine some of those landmarks and how they fit in with your plan’s bigger picture:

Savings and Budgeting: If you haven’t got one already, start with a budget. Once income taxes have been deducted from your earnings, you will be left with your net income. From here, you can start documenting your expenses, such as housing or rent, utilities, car payments and other expenses. This information will be crucial for determining how much you can afford to save and how much you should consider as your discretionary spending.

Investments: Once you know how much to save, you can begin to make investment decisions that will be pertinent to you and your personal financial roadmap. With a long-term focus, investments have the potential to provide greater long-term returns than an interest-bearing savings account and can also be used to build a nest egg for retirement. As you navigate through life, your financial plan and risk tolerance might change, and you might want to change your investment allocation accordingly.

Credit and Managing Risk: Developing and establishing good credit through timely payment of bills is a another key component to financial planning, as it can impact  your future borrowing plans to further your education, buy a home or start a business. Meanwhile, managing risk through the purchase of car insurance, homeowner’s insurance or life insurance offers protection against unforeseen occurrences, and can also provide you with greater insight into potential liabilities that need to be built into your budget.

Estate Planning: Often mistakenly viewed as something that’s only relevant for the very wealthy or for those preparing to enter retirement, estate planning is a practical tool for people of all walks of life—one that not only helps you document your entire wealth picture, but is also beneficial in the event that you are no longer able to make financial decisions on your own. Some of these important decisions might include the manner in which those finances should be passed on to loved ones or perhaps some longer-term legacy planning considerations.

The term “financial plan” itself might carry some undeserved implications, but the truth is that it can provide you with the freedom of making choices to preserve your income and guide you to achieving your plans for the future. Of course, you can also speak with your financial advisor about creating your own financial roadmap, or visit our G2G Impact resource center for more planning tools and ideas.

Jordan Sheiner is an associate relationship manager for CIBC Private Wealth Management, where he works closely with clients and their advisors to structure and implement comprehensive investment and wealth management strategies.