A financial plan creates a complete picture of your finances. It determines your short and long-term financial goals, which can include longer-term goals, such as retirement, and shorter-term goals, such as saving for a car or a home. You are never too old, too young, too wealthy, or too poor to engage in financial planning. Your goals may change at each life stage, it is important to have a road map to assist you in achieving them and identify important milestones so you know you’re on the right track.

A rule of thumb is to save the equivalent of three to six months of living expenses in an emergency fund/rainy-day fund to get you through unexpected events such as a financial setback or car repair. These reserved funds will prevent dipping into your savings or borrowing from your credit card.

A good rule of thumb is that a savings account is a good for short term needs, especially if you need easy access to your funds. Investments are a smart way to grow your savings over the long term, protecting them from depreciation and maybe even making them earn more money for you. For example, saving for retirement. It might be best served in a Registered Retirement Savings Plan (RRSP). You might also want to consider a Tax-Free Savings Account (TFSA). These investments offer tax benefits that you can use to save even more for short or long-term goals.