Budget Vs. Financial Plan: Here’s Why You Need Both

The term “financial plan” can be a little confusing because most people people have never actually seen one. To add to the confusion, there are a lot of misconceptions of what a true financial plan is or isn’t.

For example, while there might be some overlap between a budget and a financial plan, it’s important to know that the two are distinctively different. Your monthly budget helps you keep tabs on your monthly spending habits to understand the full picture of your expenses and how much “room” you have left over at the end of the month. Your financial plan on the other hand is a roadmap to your financial future, telling you exactly what you need to do on a monthly basis to maintain your lifestyle (and your budget) into your future.

In this article, we’ll show you what a financial plan is, what it can do for you and why you’ll need one for your financial future.

Financial Planning 101

The ultimate goal of any financial plan is to align your financial activities with your lifestyle and retirement goals. For most people, this means being able to maintain their lifestyle into the future.

In other words, think of it as being able to maintain the same home, vacations, restaurants, hobbies, and other things that you enjoy both while you work and when you’re retired. Since it’s a pretty big goal, your financial plan needs to account for several things, not just your budget or your investments. Here are the big three:

1. Investments And Wealth Management

While a good financial plan encompasses much more than investing, it is still the foundation of any plan, and essential to building your wealth over time. For this reason, it’s the most commonly recognized part of a financial plan.

The uestion for most people is, “What should I invest in?”. Broadly speaking, the answer is stocks and bonds. However, rather than trying to pick individual stocks and bonds, or paying someone to try to do that for you, research has shown that “indexing” produces better long-term results.

Not only does indexing tend to perform just as well or better than any mutual fund or stock broker, it comes with a major advantage: it’s cheap. In fact, what most people don’t know is that the money you’ll save in fees almost guarantees that you’ll do better than other alternatives over time. If you have mutual funds that you got from a bank or financial advisor, fees could literally take half your life savings with you barely even noticing, because they’re skimmed off the top before your returns are calculated.

Aside from the fees, the other potential wealth killer is taxes. A solid financial plan will tell you how much to invest in various tax-sheltered accounts like RRSPs, TFSAs and RESPs to help you hit your goals with more money in your pocket.

2. Borrowing and Mortgages

It’s true that not all debt is bad. In fact, money you borrow to purchase a home is almost always good. The trick is to understand the difference between good and bad debt, to avoid pitfalls, and to structure things so that you don’t spend more than you need to.

A classic example is having mortgage payments and credit card payments at the same time. Your mortgage interest rate should be in the low single digits, while your credit card interest rate is probably 20% or more. Often, in a situation like this, it makes sense to use your mortgage to pay off your credit card and trigger instant savings.

Optimizing your borrowing decisions has the potential to put more cash in your pocket on a month-to-month basis, and save you hundreds of thousands of dollars over your lifetime.

3. Insurance and protection

At some point, almost every household will experience something unfortunate that can set you back: an accident, illness or even a death. When it happens, the insurance component of your financial plan is there to make sure that a health crisis doesn’t also become a financial crisis for you, your spouse or any dependants.

Just remember that the ultimate goal of your plan is to maintain a consistent lifestyle both now and in the future. Your insurance can cover the bills for as long as you need to still reach that goal.

There are three types of insurance that can act as a safety net for your financial plan: Critical illness insurance, disability insurance, and term life insurance.

Where your budget fits in

Remember that part above about your budget not being the same as your financial plan? Well, it’s not, however it is in fact a very large part of your financial plan.

On one side, there’s the expenses that we all have enjoying our lives: the housing, travel, food, and hobbies which your plan is trying to maintain over the long run.

On the other side is knowing how much you can afford to put towards your plan on a monthly basis. This includes everything from the debt payments, investment contributions, and insurance premiums that make it all possible.

So do you choose the joy of a $5 latte right now or the joy of retiring a few years sooner?

Truthfully, there’s no right or wrong answer here. A financial plan is like a crystal ball that can show you where your budget is likely going to take you so you can make the best decisions.

Life is a balance. You want to have fun and you also want to be responsible. You want to enjoy the here and now and you want to know the future will also be good. Our advice? Make a budget, build a plan, and march forward with your eyes  wide open.

Grow your wealth. Manage your borrowing. Protect your assets. Planswell gives you a free plan that ties investments, insurance and mortgages together so you can maintain your lifestyle throughout work and retirement.

Strong Women Would Rather Be Alone Than

When a woman is happy being independent, she often earns the admiration of those who know her, male and female alike. Many people can’t understand how anyone can be happy being alone.

There is an overwhelming desire from many women to be in a relationship. This need to be with someone means that some women will settle for anyone that they deem ‘good enough’, and all too often, good enough means not very good at all.

It’s such a shame that so many women place all of their self-worth onto being in a relationship. The fear of being alone is so strong in some people that they feel that their life isn’t worth it unless they have someone by their side. They project all of their happiness and fulfilment onto another person, something that is always guaranteed to result in a bad outcome.

The strongest women are those who are able to find these things within themselves, rather than relying on someone else to provide them. Women like this are happy with their own life, and they don’t need someone by their side just to feel like their lives are worthy of having meaning.

Strong women don’t waste their time on losers because they have high standards.

They’re happy being alone, so if they’re going to be with someone, then they expect them to be worth it.

They won’t settle for someone who won’t treat them properly. They won’t allow a man without their own goals, direction, and independence to have a place in their life.

They expect more of their partner as the bare minimum – meaning they have no time at all for losers who are only interested in using them for sex, housework, and company on their own terms.

They expect a mature relationship consisting of love, trust, and respect.

They value their time and their energy enough to know not to waste it on people that aren’t worth it. They know their worth, and they won’t take sh*t.

Strong women can often intimidate certain men. These men are afraid of fiercely independent women, because they can’t be controlled or kept in line. They don’t like the idea of women being equal with them or strong.

That’s why so many strong women don’t even bother dating. They can’t be bothered to waste their time on people who don’t deserve it. They don’t want to meet up with men who see them as inferior.

They’re happy, they’re satisfied, even if it means being alone. Strong women don’t waste their time on losers because they value their self-worth enough to be independent until they find someone worth their time.

A strong woman knows that the man of her dreams will put her above everything else in her life. That he would never intentionally hurt her. That means no more games, no more worrying about what he’s doing at any given moment –that he will be good to her, respect her, love her and keep her faith for as long as the two of you live. He’ll be the person that you can rely and depend upon. Because you are that strong woman.

My End of the Year Ritual

The end of a year is such an exciting time. For me, I can just feel the change in energy, the shift in perception, and the immense curiosity of what is to come. I find myself feeling extra positive at the end of each year, and feeling like anything is possible. And really, it is.

Even though the end of the year is such a hectic time with holidays, parties, and family time, I find it’s a time of going inward and reflection. I just love taking time with myself to go over the past twelve months, honor what has happened and prepare for another whole year.

You may all have your own rituals of how you close out a year, but I want to share with you what I do to say good-bye to the year that has passed and say hello to a brand new era of our lives. Check out my own end of the year ritual below!

  1. Gratitude meditation. As a perfect way to start my ritual, I take some time for meditation. Spend a few minutes in silence with your eyes closed and just feel gratitude. You can think back to experiences or people that have filled you with joy this year and take these minutes to just be grateful. Feel this feeling in your whole body and soul. Epitomize being grateful for everything that has happened up until this moment.
  2. Journal about all the challenges, experiences, and lessons learned. Although a great year in many ways, 2018 was also an extremely challenging year. This journaling portion for me will be so important, as there has been SO much I have learned and been through. Take an inventory of all that has happened, recognize it, honor it, and then set an intention to let it go. Think of the New Year as a clean slate; keep the past in the past and allow space for the excitement of a brand new year.
  3. Set intentions. You all know by now, I love intention setting. Again, it makes me feel like anything is possible. You could again take some time in meditation, or just go inward and see what your spirit truly wants for this year. Maybe it’s focusing on self-care, or building a business, or finding a romantic relationship. Listen to what the soul wants, and send this intention out to the Universe to be manifested. Your thoughts, words, and actions are so powerful. When you truly want something, the world will conspire to help you achieve it.
  4. Make an inspiring to-do list. I love having things to look forward to. Sometimes it’s fun to make a list of fun things you would love to do in the days to come. Maybe take a fun family vacation, go on a meditation retreat, or even read a book you have been longing to dive into. Make a small list of fun things you would like to do for yourself in the coming year. If you are feeling even more eager, you could even pull out a calendar and write it down there, truly encouraging you to follow through on making time for you and your joy! Remember you are in charge of your happiness, make yourself a priority and find time for yourself in 2019.
  5. Let go. Perhaps the hardest step for many of us, me included! I love to micromanage and make sure everything gets done, so surrendering the outcome to the Universe can be super challenging. Once you have gone through all these preparatory steps, it’s time to just let go, and allow everything to happen in due time. Of course, it is still necessary to take positive actions in the direction of your dreams and intentions, but there is no need to force or put pressure on yourself for the outcome. I have found that everything happens for a reason and in the perfect timing. Trust that life will follow in this way.

I would love to hear your end of the year rituals, and what you do to prepare for this brand new year! Thank you for spending 2018 here with me on the blog, I’m so excited to see what 2019 has in store for us!
Happy New Year!

The 5 Best Pieces of Advice I’ve Received

Do you ever have one of those moments, where you hear a sound bite or a quote, and you know it has just changed your life? Or have you ever had a conversation with someone you admire, and they bestow upon you advice that makes you see life from a brand new perspective? I know you all can probably answer yes to these questions, and you can appreciate the importance of valuable advice passed down, year after year.

I’ve spent some time lately thinking about my own life path, the ups, the downs, and the lessons that have come with it. In my reflection, I thought it would be fun to pull out some of the greatest life hacks shared with me along my journey thus far. These five pieces of advice I share with you today have changed my life in many ways: from saving relationships, to helping me through dark moments, to even moving me along on my career path.

I truly believe knowledge is power, and of course, like Maya Angelou says, “When we know better, we do better.” I lovingly pass along these words of wisdom that have changed the way I live my life.

1. Begin each day with a grateful heart. Cultivating an attitude of gratitude saved me from one of the darker moments in my life. Every day that we wake up living and breathing, we are given a gift, a clean slate, an opportunity. It is up to us how we choose to spend that day, but how beautiful it is that the opportunity is presented to us. By remembering gratitude in the morning sets the tone for the day in a positive light, and truly has the power to create meaningful change in our lives.

2. You cannot control the external world, but you can control your reaction to it. This is one of the most empowering pieces of advice I’ve been given, and my life was never the same after hearing it. Life will continue to happen outside of us, and it’s true, we cannot control it, but how amazing it is that we have the ability to monitor our thoughts and actions, take note of our habits, and consciously react to the world around us. Whenever life feels out of control, I remember that I can manage anything when working from the inside, out.

3. Finding forgiveness sets you free.
 I used to really love to be the person that held grudges (yes, I’m a Scorpio, it happens). Whenever I felt wronged by someone else, it only seemed fair that I be allowed to act out, hold on, and make it known that I was the victim of something unjust. After a period of time, I recognized how horrible this felt. And then I started to learn about the miracle of forgiveness. The truth is the purpose of forgiveness is not to benefit the person or thing that hurt you, but to release yourself from the shackles of the past. I had some difficult moments in my childhood (like we all do), and I’ll never forget my mom telling me over and over “don’t be a victim.” When you forgive, you release the victim mentality, you find freedom, you come back to the present moment, and open yourself up to new possibilities in life.

4. Release the need to take things personally. I credit this piece of knowledge to don Miguel Ruiz and his book The Four Agreements. This was one of the very first self-help books I ever read, and it opened my eyes to a brand new way of viewing life. I used to really care about what people thought of me, and truthfully, I am still working on it. Whenever I get into a funk about how someone treats me I remember that it has nothing to do with me, everything to do with them, and it really helps diffuse the situation. A bonus here is to send that person love and compassion, it always helps.

5. If you’re being your authentic self, you have no competition. I used to really worry about how I was going to make my mark in the world. Competition and comparison ran rampant in my mind, and it was draining trying to sort out how I could set myself apart in a world of billions of people. The antidote to this problem is to find out who you are, get in alignment with it, and come back to it, every single day. There was so much relief for me when I was able to truly bring this into practice in my life. I’ve been working a lot on what it means to cultivate your own sense of self, and how to live that, every day.

I hope these five pieces of advice give you some support on your own journey in life.

I’d love to hear what advice has been life changing for you. Let me know in the comments below!

5 Things to Stop Doing Right Now

This week’s blog is going to be short and sweet. Sometimes, I think it’s really effective! When I learn something, I feel it so necessary to share with you.

I’ve been taking a lot of time to go inward and reflect and journal lately, even more than usual. I’ve had a lot of ideas and really important lessons spring to mind because of it. Here are the 5 common thought patterns that I’m sure we would all be fine without:

1. Comparing yourself to others, and thinking that you have to be like everyone else
You don’t have to be like everyone else, darling. You’re unique for a reason. Don’t compare, don’t judge, just be.

2. Thinking that you’re always doing something “wrong” 
We get into the headspace that we are always doing things wrong, and that we have to fix ourselves. Did you ever stop to think that the things you’re doing “wrong” are part of the path to improving? It all serves a purpose.

3. Believing life and the Universe do not love and fully support you
The Universe will support you as much as you are open and willing to trust and be supported. We all have the ability and capability of feeling and being this way. Open up to it.

4. Thinking that you are not enough right this very minute
Let’s live a life of abundance, shall we? The first step in that is believing that you are deserving and that you are enough, right in this very minute. You are not lacking anything; you are whole and complete.

5. Believing that you cannot have what you desire
We are powerful beings; we can co-create anything we desire. Want to bring something into your life? Get clear, take action towards bringing it in, and allow the Universe to help you manifest. Keep the faith.

I hope this inspires you to cut some of these negative mental habits out of your life starting today! What else can you commit to that will bring you happiness and inner peace? Let me know in the comments!