Prepare like a politician when it comes to financial planning
August 13, 2015
We suggest you add a little politics to your household financial planning. The objective is to use this current federal election to motivate you to consider your own priorities.
This year’s federal election, to be held Oct. 19, is going to drag on significantly longer than others have in the past. Use this time to your advantage and do a little personal financial planning.
The goal of the main three political parties is to get elected. From a financial point of view an individual’s goal can be related in financial terms. Pay down debt, help your children with the cost of a post-secondary education and prepare for retirement.
In both politics and financial planning the direction is based on your fundamental philosophy. The Conservatives, Liberals and NDP base their ideas on their philosophy.
That is a good basis for you determining your financial priorities.
What is your philosophy?
Learn to articulate your strategy and connect that strategy to your own personal priorities. Then be prepared to defend your position.
In politics that was on display in the first leaders’ debate, held last week. All leaders were questioned and the opposing leaders tried to persuade the audience of how their opponents’ plans were flawed.
This is democracy at its best. Freedom of expression of ideas and the objective to sell their vision to the voters who will eventually decide who runs our country after the October federal election.
These debates are crucial. They can affect or decide the outcome.
Leaders prepare for many weeks and rehearse in mock debates so their advisors can coach them on how to be better at achieving the election goal of winning our approval and getting elected.
From a financial planning prospective you should prepare and almost rehearse and defend your Financial Plan because there will be forces trying to deflect you from your financial objectives.
You might be logical and have a sound financial plan. However our biggest temptation for failure is these crazy low interest rates.
Some feel money is too cheap to resist and they decide to borrow for something they likely do not need. You, like the politicians, must be able to defend your original position and not be deflected from your ultimate goal.
You, like the politicians, must set your own course in what you intend to accomplish. The financial reality is what will this cost and finally where will you get the funds.
All this has to be done well, balancing all your various different priorities.
Then as time goes by you have to balance changing circumstances and conflicting priorities and keep your plan updated and on track.
Our current government has been forced to do this because of their promise to deliver economic prosperity. The Conservatives have had to account for the price of oil and the economic slowdown in China, both of which are negatively affecting the Canadian economy.
You will likely have events come up over time that will impact your long-term objectives.
We encourage you to consider your own financial plan over the coming months while listening to the politicians articulate theirs.