Planning it out is good for your wealth and your health!
You may have seen the quote “success is where preparation and opportunity meet.” Does this statement ring true or false to you?
Some people are risk takers and love the thrill of heading out on a trip with no plan in place. These travellers experience surprises at every corner and are exhilarated by solving problems on the fly. But how big a risk are adventure seekers really willing to take when, let’s say, their nest egg is on the line? And what does the element of ‘not knowing’ really do to a person’s well-being?
There are other people who plan out every detail in an extreme effort to control the environment around them. Unrealistic? Yes indeed! Although planning is a solid step in the right direction for managing unforeseen circumstances, living your life is important too. How does squashing goals and dreams to stay on plan affect a person’s well-being?
Now add one of each of these types of people into a relationship, or two of the same type of people and see what happens – it can get messy.
The process of financial life planning balances these approaches and provides perspective on what makes you, and if applicable, your partner tick.
Why is financial life planning good for your health?
According to the Mayo Clinic, “Stress that’s left unchecked can contribute to many health problems, such as high blood pressure, heart disease, obesity and diabetes.” We know that some stress is actually good for us, but prolonged stress can take its toll on our emotional and physical well-being.
The Financial Planning Standards Council (FPSC) conducted follow-up research in May of 2018 to a 2014 survey of Canadians (excluding Quebec) and found relatively similar results:
- 4 in 10 Canadians rank money as their most significant source of stress ahead of personal health, work and relationships.
- 51% reported being embarrassed about their lack of control over finances.
- 48% lose sleep over financial worries (51% of which were women, 44% men).
- 83% of Canadians have at least one financial regret.
Let’s add relationships to the equation. An Ipsos Reid Poll conducted on behalf of BDO found that “Six in ten (59%) Canadians in a relationship – whether living separately, common law, or married – say they wish they could change their partner’s financial habits. ” The report goes on to highlight 1 in 3 Canadians in a relationship rarely or never discuss finances. Do you see the elephant in the room?
How about finances and life transitions – there is nothing like retiring without a clear income stream, or losing your job without an emergency fund to turn up the stress level in your life.
The FPSC conducted a 3-year longitudinal study ending in August of 2012 to determine the emotional and financial well-being of Canadians who work with a Certified Financial Planner and have a financial plan in place. They found that 73% of respondents agree that “financial planning has helped me have greater peace of mind”.
Financial life planning addresses:
- you – your values, your behaviour and attitudes about money
- if applicable, your partner’s values, behaviour and attitudes about money
- the reality of the situation (everything on the table)
- a plan that works for everyone involved
- ongoing check-ins, tune ups and adjustments to address life transitions
It doesn’t take a very big leap to see that planning it out is good for your health!