Skip to content

Investing Basics

Your Financial Planning Road Map


6 Steps to Building a Personal Financial Plan

These 6 steps are designed to help you get started on the road to financial security. By following the six steps, your journey will take you from where you are now to where you want to be for the future.

  1. Setting goals and objectives is the first step of any financial planning process - if you do not know where you are going, how can you know when you get there, or even decide which route to take? Setting goals and objectives is the foundation of any sound financial plan.
  2. No matter where you are heading, you need to assess where you are now, and what you already have in place for the journey. Data gathering will ensure that your personal documents are up-to-date and that you know your current financial situation.
  3. Heading in a general direction won't guarantee success in reaching your final destination. Before heading out on your journey, do your analysis and find solutions. This strategy will assist you in reaching your stated goals and will provide you with a roadmap to help you achieve these goals.
  4. Your financial plan should confirm that your goals are achievable, and appropriate recommendations will help define what you need to do to ensure that you reach these goals.
  5. A financial plan is only helpful if the recommendations are put into action. Implementing strategies will assure you reach your destination.
  6. Finally, follow-up and annual reviews are critical to ensuring you maintain a clear focus in order to succeed.

  1. Setting Goals and Objectives

    Give some thought to your financial goals. Some may be short-term in nature, others long-term. Assign each one a time frame and put them in order of importance to you. These goals are the building blocks to any sound financial plan. Our Getting Started section can assist you in identifying goals and establishing time frames. Your Savings Tool will determine the savings required to meet your financial goals.

  3. Data Gathering

    Begin by Organizing Your Financial Documents. Assess your current financial situation by completing a Net Worth Statement and a Cash Inflow/Outflow Worksheet.

  5. Analysis And Solutions

    Depending on the goals that you established in Step 1, you will need to perform some further analysis to define a roadmap to help you achieve your goals. This may include analyzing your retirement, education, debt or insurance needs.

    For most Canadians, Retirement Planning is a major goal that requires considerable financial commitment. By completing the Retirement Contribution Calculator we can show you where you are today and how much you need to save to meet your retirement goals.

    With the costs of a typical four-year Canadian university undergraduate degree program currently estimated to be about $40,000 including room and board, and that figure rising, most parents consider Education Planning an important long-term financial goal, and a regular investment plan is an important part of this strategy. Our Education Savings Tool is designed to assist you in determining how much you need to save today in order to meet future education costs.

    While you may not wish to drastically alter your lifestyle, a budget is important for planning purposes and to determine the availability of funds to set aside for savings. Debt Management is the ability to handle your current debt and whether one can assume further debt. Since most of us incur debt at some point in our lives, effective debt management is critical to a sound financial plan. Debt reduction often ranks as a primary financial goal, especially if it includes paying down a mortgage. The first step is to determine how much you currently owe using our Total Debt Worksheet. The second step will determine your Total Debt Service Ratio (TDS), which Financial Institutions use to measure your current debt situation in order to assess and approve your credit and loan applications.

    Life can be unpredictable. Whatever your age and personal situation, make sure you have a plan in place to provide for your survivors. Mortgage Life Insurance and Mortgage Critical Illness Insurance can help to ensure that your family is adequately prepared in the event of your death.

    Any goal, regardless of the amount, can best be served by applying a systematic approach to savings. Consider investing regular amounts to your plan during the year as opposed to attempting to come up with large amounts when it is required. Not only do you avoid the rush and pressure, but you take advantage of dollar-cost averaging. TD's Pre-Authorized Purchase Plan Tool will show you how to implement this important strategy for any of your goals.

  7. Recommendations

    Now that you have established goals and objectives, you will want to begin by implementing the recommendations that will ensure that you reach these goals.

  9. Implementation

    Once the preparatory work of analyzing, determining and calculating is finished, the most important step is implementing the recommendations to help ensure your goals are reached. Our mutual fund resource page provides information on mutual funds, including the types of mutual funds we offer and some questions you should ask yourself to determine what mutual funds may be right for you. You can also visit any TD Canada Trust Branch or call 1-866-222-3456.

  11. Follow-up and Periodic Reviews

    Finally, follow-up and annual reviews by both yourself and your financial planner are critical to ensuring your success. Your financial situation should be reassessed at least once a year to account for any changes in your life cycle or economic conditions. Achieving your goals and objectives are the ultimate measure of success in the 6 steps to a personal financial plan.