11.2.3 Case study: Financial steps needed to complete goals

Steps 1 to 5 on the previous page give you an overview of your finances. This page will help you decide what steps you can follow to make your financial situation what you want it to be.

You can go through all the steps below in fillable forms on the page on the Financial steps to reach goals.


Saving is a key step to achieve your financial goals. You need savings to reach the goals you identified in Step 4. It's also a good idea to put money aside for your financial security.

Carmen and Justin have money in savings accounts for their emergency fund. Their savings goals include saving money for retirement, so their focus is to make sure they meet their savings goals each month. Other spending has to come after their household expenses and savings.


Mortgages and other debts

Paying off debts is often the best start to financial planning. This page summarizes your mortgage and other debts, and the payments you need to pay them off. If you have extra income to pay off debts, you'll reduce the high costs of debt and be able to allocate your money to your other goals.

Make at least your minimum required payments every month to avoid penalties. Pay off the debts with the highest interest rates first, such as credit card debts. Then allocate the payments to the debt with the next highest interest rate.

Carmen and Justin will use the $119.79 a month left in their budget from Step 5 to add to their loan repayments and pay off Justin’s bank loans more quickly. They pay their credit cards off each month, so those payments don’t have to be treated as a debt.

Mortgages and other debts


Insurance can be an essential step in managing financial risks and passing wealth to future generations. (See the module titled Insurance.)

Check whether you have insurance through your employment, credit card or other sources. List the coverage you need and the monthly cost of the insurance. (If you pay an annual premium, divide the premium by 12 to place it in the chart.)

Between Carmen's group life insurance benefits through her employer and the additional personal life insurance policies Carmen and Justin have, they think they have enough personal insurance. However, they also want insurance to cover the unpaid amount of their mortgage on their home, $150,000.



Review your investments and investment goals. (See the module titled Investing.)

Carmen and Justin have some money in Registered Retirement Savings Plans (RRSPs) and some in non-RRSP investments, as well as their employment pension. They should review their investments with a financial professional or an investment advisor to be sure that their investments are appropriate for their situation.



Plan early for your retirement—it will be too late when you're about to retire. Consider what income you'll need when you retire and how you'll get it. (See the module titled Retirement and pensions.)

By age 71, you must close a Locked-in Retirement Account (LIRA). Then you can:

Carmen and Justin expect to rely on a combination of public and private pension, with some additional income from their investments (in the form of Registered Retirement Income Funds (RRIFs). Their income won't add up to the income they expect to need, so they may choose to work longer or cut back their expected expenses.



If the difference is negative, you won't have the income you'll need when you retire. Your options include:


The taxes you pay are a significant part of your household and personal finances. Plan what you will do with any tax refund you receive so that it strengthens your financial position. Carmen and Justin plan to use their refund to deduce their debts and save by paying less interest.

Check that you have all the benefits and deductions you are due. File on time to avoid penalties.


Estate planning

Estate planning is an important part of planning your finances to ensure that you achieve your goals for your family and survivors in the way you want them. Careful planning is essential since you won’t be there to fix any problems that come up.

estate planning

Financial review

A plan is only useful if it is realistic. Your ideas may change or the facts that they are based on may change. Your plan will be stronger if you think ahead about problems that could come up, and how to manage them.

Check your plan whenever there’s a major change in your life and adjust it if needed. Your goals and plans will change over time, so set a date to review your financial plan once a year and mark the date in your calendar.


Personal values, emotions and behaviours

Setting goals and plans is an activity that includes many personal factors, such as your values, emotions and behaviours. These factors may support your plans, but they can also work against them. It's important to understand your personal strengths and limitations and how your relationships with others affect your decisions. Then you can take them into account when you make your financial plans.

Example: Lisa enjoys going out with her friends after work for drinks, a meal and sometimes dancing. She wants to save more money, so she decides to cut out the after-work gatherings. She's okay for the first week, but by the second week she feels lonely without her friends, and starts going out again. Her plan is in trouble because it does not take into account her social needs. She might achieve her goal more easily if she plans to go out just one night a week, or arranges to meet her friends for dinner at home.

You may not like to think about the future because it's so uncertain. You may feel overwhelmed by the amount of information you'll need to gather for a financial plan. You may not want to make sacrifices in your current spending in order to achieve future goals. These common human responses make it harder to plan for your own future when you are dealing with day-to-day realities. But when you think through your plans and find a strategy that works for you, you will feel more in control and be more able to manage your future.


Many personal factors, such as values, emotions, habits and other behaviours can affect your finances. Identify those that will strengthen your plans, and build on them. Look for ways to minimize the impact of personal factors that might weaken your plans. See the module titled Saving for more information.

Check off any steps below that would help you make—and stick with—your financial plans.

Personal values, emotions and behaviours

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