Does Your Financial Plan Make You Stronger?

Author:  Brenda McCrae   |   Cash Management

I have been working in the financial services industry for almost 17 years. During that time, I’ve always thought there was something vital missing from the traditional “financial advising” process. That is, a client needs to have a good grasp on their discretionary spending in order to be able to amass savings. If they don’t have this fundamental understanding, it doesn’t matter what amount I advise them to save, it is unattainable.

I attend many seminars and conferences to keep abreast of the changing environment this industry is so sensitive to, but one seminar, in particular, was life-changing for me, my practice and the clients whom I am privileged to work with. My “ah-ha!” moment came in September 2014 when I attended a seminar in Cambridge featuring Stephanie Holmes-Winton, CEO of The Money Finder and founder and board chair of the Certified Cash Flow Specialist™ designation program. She introduced a roomful of advisors to Behavioural Cash Flow Planning. This planning helps people to regulate what they spend, but it does it in such a way that clients are not focused on what they can’t buy. Rather it focuses on short term goals, debt restructure and a weekly spending goal that’s consistent but leaves them in control of how to spend it.

I’m often asked, “How is this process any different from budgeting?” Budgeting is restrictive. It’s highly unrealistic for daily spending. While budgeting works for projects like home renovations or vacations, creating monthly budgets can backfire because life includes many unexpected costs. With a Behavioural Cash Flow Plan, you have an amount of money to spend on the things you can control, but you’re free to spend that set amount on whatever you like.

Household debt levels in Canada are higher than in any other country, according to a report by the Organization for Economic Cooperation and Development (OECD).

The Canadian government has certainly recognized the issue. In 2015, they released the National Strategy for Financial Literacy, a strategy designed to help Canadians better manage their money. Yet, according to a recent survey by the Financial Consumer Agency of Canada, less than half of Canadians (45 percent) have household budgets, 60 percent do not know how much money they will need in retirement, and a whopping 48 percent reported that they would be in financial difficulty if their paycheque was delayed by as little as one week. It’s a small wonder then, that an ever-increasing number of Canadians are finding it difficult to achieve their life dreams and financial aspirations.

Clients who work with a Behavioural Cash Flow Plan find money available to them that was otherwise lost to interest charges, fees and the variable day to day spending of life. These newly found funds can now fuel their goals and dreams and allow them to get the most out of what they have.  I have helped clients to set up personalized Behavioural Cash Flow Plans and watched them stay comfortably within their discretionary spending limits as they grow their savings successfully.  It is gratifying for all.

Brenda McCrae

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About the Author

Brenda McCrae is a Wealth Advisor with Assante Capital Management Ltd. and an Insurance Advisor with Assante Estate & Insurance Services. Please contact her at (519) 752-3155 to discuss your particular circumstances prior to acting on the information above.

Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

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