FINANCIAL PLANNING FOR FAMILIES
Family financial planning can encompass everything from putting together a basic budget to saving for higher education and investing for your retirement.
These are the key areas to focus on when creating a family financial plan:
- Budgeting and Spending. Putting together a budget is a great way to get a “big picture” feel for where your money is going. Tracking your spending can not only help you do a better job of sticking to your budget, but it can also let you know if you need to reassess any areas in your budget.
- Debt Repayment. Your family financial plan should include a timeline for paying off all your debts, with a focus on paying off your high-interest debts first. Prioritize paying off debts like credit cards bills (with higher interest rates) over debts like your mortgage (which has a lower interest rate).
- Financial Goals. Think about what your short and long-term financial goals are. Decide how much you can realistically put aside to fund short-term goals such as an emergency fund or vacation and long-term goals like saving for university or your retirement years. Setting up automated savings is a great way to stick to your savings goals.
- Retirement Planning. Retirement planning should be a two-pronged approach. You should open a TFSA or RRSP to start saving for your retirement, as well as participate in any retirement savings plans your employer offers.
- Higher Education Planning. The cost of higher education keeps going up, so it’s essential to start saving as early as possible for your children’s education. With a Registered Education Savings Plan (RESP), you can save for your children’s education tax-free and be eligible for additional grants and bonds to help you save more.
- Insurance Planning. You should consider term life insurance for both you and your spouse. Life insurance gives you peace of mind that your family will have financial protection if either of you dies.
- Estate Planning. You must have a will in place. A will ensures your assets are distributed as you wanted them to be and enables you to name a guardian for your minor children. You should also get a power of attorney (POA) document drawn up indicating who you want making financial or health decisions on your behalf in an emergency.
Working with a financial advisor to put together a family financial plan means you’ll be able to benefit from their experience and ability to provide a complete view of your financial situation. Reach out to us today to book a meeting and get started on your family financial plan!