Getting Organized for Financial Planning (especially if you've never done it before)

It can be overwhelming to get started with financial planning, especially if you’ve never done it before. 

When I describe the process to potential clients, I try to be as honest as I can about how tedious and time-consuming it might be to gather up and share all the information I need to get started. 

If you aren’t the kind of person to keep a digital copy of your tax returns and investment statements carefully filed away, have access to your CRA and Service Canada accounts, and regularly track your spending, then it might take you three or four (or more) hours to lay your hands on everything I ask for. 

And, because it still seems like many of the folks in and around the finance industry just love to make people who know less than them feel stupid, you might not even feel totally sure what I’m asking for, and might be embarrassed to ask!

Friend: I’ve got you!

In the thirteen years I’ve been an advice-only financial planner, and for the ten years I spent as a banker before that, I’ve walked literally thousands of people through the process of gathering and sharing their relevant information. 

Those experiences are why I started Ready…Set…Money, with 5(ish) minute episodes designed to explain and simplify the basics of understanding your whole financial picture. And wanting fewer people to be stressed out by the process is why I’m writing this today.

If you’re thinking of getting started with financial planning, and are feeling intimidated by what you think you need to know before you even begin, here’s a step by step guide to getting organized:

Step One: Breathe

It’s normal to be overwhelmed and even embarrassed by being overwhelmed. Nobody talks about this stuff in casual conversation, and it’s easy to assume everyone except for you has their act together. 

You can take this as slowly as you need to. Your goal is to get started, not to become an expert overnight. 

Step Two: Start With What You Already Know

Maybe you know exactly what you spend but have no idea where your tax return is. Start with your spending.

Maybe your pay statement is emailed to you and getting it is as simple as opening your inbox and downloading the PDF. Start there. 

Step Three: Take The Rest One Topic At A Time

I’ve listed the topics below, including questions you want to ask yourself, documents that you might need to gather, and episodes of Ready…Set…Money that might help. 

But before you tackle the list, step four is important.

Step Four: Ask Questions

If you’re working with a financial planner, this last step is the most helpful, because it comes with a list of things you don’t need to know, because your planner is going to help you figure them out as you work through the planning process. 

These “too hard for right now unless you’re into that sort of thing” pieces of information include: 

  • Exactly what investments you own

  • How much your portfolio costs

  • What your pension will pay you

  • How much CPP or OAS you’ll get

  • How the planning software works

The most important thing in financial planning that only you can provide is what you want out of your life, and what success (or failure) will look like. 

The rest we can build together!

Step Three (the sequel): The Actual, But Not Exhaustive, List

Income: 

How much do you usually bring in, before tax? What’s deducted from it before it hits your bank account? Do you get a bonus? A car allowance? Are you already receiving CPP and OAS, or a pension? Any other kind of income that you can count on? 

You might need to find the most recent versions of the following documents: 

  • Employment contract

  • Pay stub

  • Net employed income

  • T4A slips for CPP, OAS, and pension benefits already being paid

These episodes of Ready…Set…Money might help you: 

Expenses: 

How much does your life cost on a regular basis? What kinds of things will pop up throughout the year? Does your car need to be replaced soon? Is your computer on its last legs? Are you planning a big trip next year? Are your kids about to move out and take their midnight fridge-raiding habits with them? 

These episodes of Ready…Set…Money might help you: 

Assets: 

What do you own? What’s your house worth, if you own one? What about your savings accounts, investments, and pension plans?  

You might need to find the most recent versions of the following documents: 

  • Personal investment account statements showing market value, book value, and holdings

  • Workplace investment account statements showing market value, book value, and holdings

  • Defined benefit pension statement

These episodes of Ready…Set…Money might help you: 

Debts: 

What do you owe? What interest are you paying? How much is your payment, and how often do you pay it? Have you made any extra payments this year? Borrowed more? 

You might need to find the most recent versions of the following documents: 

  • Mortgage statement

  • Loan and line of credit statements

  • Credit card statements (if you don’t pay off the balance every month)

Insurance: 

Do you have coverage through your employer? What have you opted into vs. what’s available? Did you buy any insurance policies personally, not connected to work? 

You might need to find the most recent versions of the following documents: 

  • Group benefits booklet (the multi-page one with all the details about every benefit)

  • Group benefits summary (the list of the benefits you personally have and their amounts)

  • Any life, disability, and critical illness insurance policies you own

These episodes of Ready…Set…Money might help you: 

Tax & Benefits: 

How much income tax did you pay last year? How much can you contribute to your RRSP, TFSA, or FHSA this year? How much have you contributed to the Canada Pension Plan in your working life? How long have you lived in Canada? 

You might need to find the most recent versions of the following documents: 

  • Tax return

  • Notice of Assessment

  • Screenshot from your CRA account showing TFSA contribution room as of the start of the year

  • Your history of contributions to the Canada Pension Plan

  • Lifetime RESP contributions made and grants and bonds received

  • Lifetime RDSP contributions made and grants and bonds received

These episodes of Ready…Set…Money might help you: 

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