Financial planning isn’t something that you do once – it’s a moving process that you’ll revisit many times as you pass through different stages of life. As you get older, you may focus on things like retirement income, estate planning or philanthropic giving, while earlier years may be centred around your growing career and family. It’s important to address each of life’s stages with both a short and long-term vision, and to recognize that this vision may change five, ten or twenty years down the line. After all, a lot can happen in a lifetime!
Here are our tips for financial planning as a young family.
Get rid of roadblocks
If you have any personal debt, such as a loan used to pay for your post-secondary education, a line of credit or even car payments, make a plan to pay it off quickly and consistently. Medical professionals are often burdened with the expense of their training, which is much higher than average. Similarly, business owners may take on debt when starting an enterprise. While repayment can eat up a significant portion of your earnings in those early years, you don’t want to carry any debt into middle age – consider it a weight you need off your shoulders as soon as possible. Additionally, if you have any credit card debt, tackle this first – high interest rates are a killer and will have a negative impact on your ability to save and invest.
Invest in your future
It’s never too early to start planning for your future – in fact, the earlier you start, the better. You can put a small amount of money toward your retirement each month, increasing the rate as you age (and hopefully, earn more). In addition to RRSPs and other savings vehicles, ask me about investment options that will preserve and grow your wealth over time. This will allow more freedom in terms of travel, lifestyle and property ownership, and will help you support children and parents as needed.
Invest in your children’s future
When you hold your newborn baby in your arms, their college years seem miles away – however, time goes by in a flash. Be prepared for post-secondary education fees (tuition, books, living expenses, transportation, etc) by creating a plan now and saving over time. The more children you have, the more critical this is. Additionally, you may want to consider investing to meet personal goals such as contributing to a child’s eventual wedding, or helping them put a down payment on a house.
Make a will
If you have children, you should have an updated will that considers their needs as well as the needs of your spouse and/or other dependents. Whether you live to be 90 or pass on prematurely, a will is essential to making sure your wishes are followed and your loved ones are cared for. Upon request, our team can arrange a consultation with an expert at Scotia Trust. Let us know if you’d like more information!
Get your insurance in order
Insurance is important at all ages and stages of life, but particularly important if you have a spouse and/or children who depend on you financially. Life insurance (whole life or term) is something to be considered, as well as critical illness insurance, mortgage and/or property insurance, and protection against disability or loss of income. Our extended team of specialists at Scotia Wealth Management can guide you in making the right choices for your family.
If you have questions about portfolio management or financial planning with Renaldo Saikali, please contact us at your convenience. We’d be pleased to offer a confidential, no-charge consultation.