Your Financial Well-Being is Too Important to Ignore



November is recognized as Financial Literacy Month in Canada. If you didn’t know, this is its 5^th anniversary.  The National Strategy’s primary focus is to improve the financial well-being of Canadians.  This month you have a chance to spring into action.  Treat November as your financial “check-up” month.  With the New Year only two months away, you may have thought about incorporating one or two money-related resolutions. Try jump starting your journey to financial health with some of the following ideas.

 

Transform Your Checklist into a Financial Tree.

 

We work more effectively when we have the right tools.  A checklist is a great tool. In addition to any financial plans you have, consider using the checklist with the ten recommended financial items every Canadian should have.  {Click here to print a copy.} Like Santa, who is known to check his list twice, you should too to ensure you haven’t missed anything.

Occasionally, transforming a tool into something easily relatable takes creativity. In my mind, I saw a healthy tree with branches depicting the ten financial items. Since I can only think of these things, I asked my friend, Liz, to create the poster board. This was the only instruction she was given.  I was astonished with the extra touches Liz had randomly added.  As you can see, pictures of life events were included:  spending time with loved ones including the family dog; enjoying recreational activities; and portraying scenic vacation spots.   My initial reaction was: “This looks too busy.  There are too many distractions.”  Then I made the connection.  Isn’t this the way life is?  Busy!  The added pictures created the reality. While you juggle life, you can’t ignore the important financial items which make up a healthy financial tree.

 

It doesn’t have to be perfect to work.

 

My poster board does not have to be fancy or full of state-of-the-art graphics to be effective.  My purpose is to create a connection to alert you that this information is too important to ignore. I believe anyone can distinguish a healthy tree from an unhealthy one.  A healthy tree’s leaves are vibrant; the bark isn’t scarred or pitted; and new growth appears yearly on its trunk and branches.  In much the same way, anyone has the ability to distinguish whether their financial situation is stable or unstable by assessing whether all the right financial components are in place.

 

How Healthy is Your Financial Tree?

 

A financial tree can be divided into three parts.  The top branches focus on taking care of the family’s needs first.     These items have a direct relationship to meeting a family’s needs if a catastrophic event occurs.

q  A Written Financial Plan

q  A Will and Estate Plan

q  Living Will and Power of Attorney

q  Insurance: Health, Disability, Life and Credit

The second part of a healthy financial tree is made up of the other items related specifically to money matters:

q  Pay yourself first

q  Registered Retirement Savings Plan (or Tax Free Savings Plans)

q  Pay your mortgage more frequently

q  Three months of savings

q  Credit:  Get it while you don’t need it

q  Registered Education Savings Plan for Children or Grandchildren.

The third part is the roots which represent  the type and amount of debt.  Debt will either make your tree flourish or stifle its growth.  “Good debt” often refers to mortgage or student loans. Building equity in your home or receiving an education to secure a well-paying job contributes to a person’s assets or ability to earn an income.   Excessive loans for any other purpose than these may jeopardize a person’s financial health.  

 

Items That Require Your Attention.

 

Here’s the challenge. 

Use this month to review your financial affairs.   If several items require your attention, then number them in order of importance. Begin the process of chipping away at them one item at a time. 

If you are a “doer” and all your items are checked, then book appointments to review your important documents, investments and insurance coverage.  This ensures you have accounted for any life changes.     

The media won’t let you forget Financial Literacy Month in November. Every year you will know when it’s time to schedule your financial health appointments so you don’t ignore the important things in life.  Just like the “Wise Owl” gloats as he sits perched on the branch in picture, you too can gloat about your financial situation.