The Ultimate Checklist

If you have your vehicle serviced on a regular basis, you are generally given a Vehicle Inspection Report.  The report has three separate categories highlighted in distinct colours. When the vehicle’s systems and components are checked, the appropriate colour receives either a “thumbs-up” or “thumbs-down”.  

Green	Checked and Okay at this time
Yellow	May require future attention
Red	Requires immediate attention

                             

We would never drive a vehicle that was not road-worthy for two reasons.

          1. We might never reach any of our destinations because the vehicle would simply quit working.

          2. We could potentially be injured or killed if we chose to ignore any maintenance required to our tires and brakes.

Here’s the dilemma.

Without regular check-ups and the proper maintenance, our vehicles can create frustration and grief for us. So what happens when we don’t regularly review our financial goals and check our current financial status? How do we know whether our systems are running up to speed? In other words, how do we know whether we are efficiently meeting our financial goals?

   

Financial Planning Standards Council created a publication called “Get More Out of Life”.     To begin my client conversations, I refer to FPSC’s checklist to gain a better understanding of my clients’ feelings. 

Scrutinizing the nine questions below allows us to conduct an inspection test.  Each question can be assigned a distinct colour to determine whether everything is okay at this time or requires future or immediate attention. If you are far away from having many “Green” thumbs-up, you might consider a service package, a comprehensive financial plan, to gain peace of mind and confidence about achieving your life goals.    

Do you feel…

q    In control of your finances?

q    Prepared for a financial emergency?

q    That you have sufficient discretionary income to lead the life you want?

q    The people you care about would be financially looked after if something were to happen to you?

q    Able to retire in your desired lifestyle?

q    You will be able to pass along your wealth in a tax effective way?

q    There is enough money to pay for post-secondary education for your children?

q    Your goals and aspirations are achievable?

q    You have peace of mind?

Since we are in the Christmas season of creating lists, this list is worth putting in our stockings as we approach the New Year.  If we wish to begin the New Year on the right foot, then we could use some help identifying where we need help.  Reviewing our list is a great start.  

Merry Christmas!

Let’s Talk About Money

I grew up hearing many quirky sayings, “Children should be seen and not heard,” “Money doesn’t grow on trees,” and another one that sticks out is "God gave you two ears and one mouth, so you ought to listen twice as much as you speak."  Well, maybe that last one is not so quirky.  When you need to have the talk about money with your spouse and family, you need to do both, listen and speak, so that you are heard and understood.

I was privileged to be interviewed for an article published for Financial Planning Standards Council on this very topic.  Talking about money with family members is not easy but “not talking” is by far worse.  Without the important conversations, misunderstandings are bound to occur.  Dropping subtle hints about your goals and dreams or expecting others to read your mind are only wishful strategies on your part. It’s okay to be afraid but don’t let fear stop you from starting the conversation. Take charge. I hope you can glean some valuable information from the following article.

How to have “that talk” about money with your spouse and family

Is it time for ‘the talk’ about money?

Money is the last taboo – or so seems. It’s a sticky subject we just don’t like to talk about. But there comes a time when there’s simply no option left but to jump in and hash it out.

It may be asking for a raise, reining in an overspending partner, estate planning with aging parents, or teaching children about debt. Delores Moskal, a CERTIFIED FINANCIAL PLANNER® professional with Cornerstone Credit Union in Yorkton, Sask. cautions that no matter the situation, leaving ‘the talk’ for too long brings consequences:

• unrealized goals
• creditors at the door
• delayed retirement
• marital friction                                                                     

When a couple has different spending and saving habits, it can jeopardize financial security, leave dreams unfulfilled, and cause marital tension. Failing to discuss estate plans with parents can cause sibling strife and mounting legal fees after their deaths. And, allowing children to run up credit card debt and cell phone bills starts them on a negative footing before they even begin to face the many other challenges of adulthood.

So just how do you start a conversation about money?

It’s not personal, it’s business

When it comes to asking for a raise or negotiating a contract, check your ego at the door and take emotion out of the equation. You may have done a great job and deserve a raise, but you have to be able to back it up. Outline accomplishments and how they’ve contributed to the bottom line by saving money or generating revenue. Taking a business approach is more likely to bring positive results.

It’s all in the family

For families, it’s about having a reality check and discussing what-ifs, says Ms. Moskal. Most people don’t plan for the unexpected like job loss, the arrival of twins or a serious illness. Others haven’t talked about buying a home or sending children to university. These are all issues that need to be discussed and planned for early.

“A neutral, non-judgmental third party can help start the conversation,” she says. “Having a referee in your corner can help prevent arguments from escalating and help uncover the path forward together.”

A financial planner, for example, can take a holistic look at the situation and help families gain a better understanding of income and expenditures, establish mutually agreed upon goals, and identify areas where actions can be taken to achieve those goals.

The upside of having ‘the talk’?

• Relationships are more harmonious.
• Dreams are achieved faster.
• A career is more rewarding.
• And, you’re setting a great example for your children.

If you need a qualified professional to help open a conversation about money, FPSC’s Find a Planner or Certificant tool can help put you in touch with someone in your area. Access additional resources.

The Dangers of Coasting: 5 Ways to Get in Gear

Has anyone asked you lately for your opinion on a specific subject?  Do you remember how you felt? I felt honored when Caroline Horcher, Manager of Public Affairs from FPSC (Financial Planning Standard Council), asked me to comment on this statement, “If I’m generally moving in the right direction, my financial goals will take care of themselves.” From our conversation, Caroline generated a five-point guide to help people get in gear towards their goals, dreams, and aspirations.  Below you will read excerpts and the five tips derived from our interview. 

The Dangers of Coasting: 5 Ways to Get in Gear

“If I’m generally moving in the right direction, my financial goals will take care of themselves.” Are you guilty of this financial planning misconception?

Coasting—even in the right direction—doesn’t necessarily mean being on track, says Delores Moskal, a CERTIFIED FINANCIAL PLANNER® professional based in Yorkton, Saskatchewan.

Delores says that not having specific goals is like driving at night without headlights. “You kind of know the road and can steer your vehicle in the right direction, but you’re never really sure.”

“You’re moving along, but you might get to the end of the road and find out you’re at the wrong destination,” she says, “whether that means you can’t buy your dream house, fund your children’s education or rely on your retirement income.”

Try Delores’ tips to stop coasting and start accelerating toward your financial goals today.

1.     Target your destination: Many people put off setting specific goals, intimidated that the next step—actually having to start working toward them—might be difficult or stressful. It can seem easier to trust that everything is progressing fine without your attention. But don’t fall victim to this fear-based procrastination: make your goals inspiring enough that you’re willing to put in the time and effort.

2.     Use a GPS: Have an honest talk with yourself. Are you doing the best that you can with what you have? If the answer is no, or you’re not sure, consider getting the help of an expert. A qualified financial planner can help you devise a road map to your goals, immediately putting you in a better position to reach them and keeping you on course as you make progress.

3.     Chart your current location: To get where you want to go, you need to take an accurate snapshot of where you are right now. A financial planner can help you take into account all relevant areas across your financial life.

4.     Know your end point: One of the benefits of planning is that you can choose your ideal outcome, rather than seeing what happens automatically (or settling for the only option left). Be detailed in your goal setting and consult with your family to be sure you’re all on the same page.

5.     Pick up speed: There’s no time like the present to start to design your financial future and make progress toward your goals. The sooner you start, the sooner your dreams can become a reality.

It may seem intimidating or time-consuming to put a targeted focus on your financial goals. But when the real danger of coasting is that you might not reach your dreams at all, isn’t it worth putting in the time and getting the help you need?

Find this article and other valuable information at FinancialPlanningforCanadians.ca and Globe and Mail Financial Planning Special Feature websites.

Is Money Causing Stress in Your Life?

If money is causing you stress, you’ll appreciate knowing you are not alone.  A national survey released by the Financial Planning Standards Council (FPSC) shows that 42 per cent of Canadians rank “money” as their greatest stress.  The results are shown here. Living with feelings of anxiety and stress is not a prescription for a happy and content life. 

Yet how is it possible to achieve life goals without feeling stressed?  In this survey Canadians with a comprehensive financial plan claimed success was possible more so than those without a plan.  Your goals may not be outrageous.  Like most Canadians you may dream about: taking the vacation you want every year, owning your own home, having sufficient discretionary income to lead the life you want, spending more time with family and friends, being able to undertake the activities you enjoy the most, and having enough money to pay for post-secondary education for your children. Talking about your personal goals with a CERTIFIED FINANCIAL PLANNER^® professional is the first step to curing the ailments of “stress”.  

Meet Some People You May Know

People often encounter financial roadblocks. I would like you to meet people you may recognize. You may have heard similar stories or lived through similar experiences.   

q  Bob and Mary presently rent an apartment and want to own a home one day.  Their incomes are relatively modest. Between their current living expenses and vehicle loan payments, they are uncertain whether they will ever own a home.

q  Randy has been talking about retirement ever since he was 55.  However, he is feeling overwhelmed with the thought of giving up his current employment income.  The uncertainty of having enough to meet his present lifestyle is playing havoc with his retirement decision.   

q  Bills are coming from every direction.  Having sufficient income to meet all these demands is causing Betty unbearable stress.  When Betty thinks she has everything covered, an unforeseen financial emergency erupts: the car needs repairing, the washing machine goes on the fritz, and her dog needs vaccinations.

q  Gwyn and Roger would love to vacation annually with their two young children.  With all the day-to-day living expenses and saving for their children’s education, their vacation dreams seem impossible.

The above stories are about typical financial challenges.  How do people overcome challenges to achieve positive outcomes? If they tried to do things their way and failed, maybe the next approach is asking for help?  My intention for writing the blog, What Does a Financial Planner Do was to provide some insight as to how financial planners can provide assistance.

Begin a Relationship with a Financial Planner  

Just like you would be reluctant to permit a surgeon to operate without the necessary qualifications, you would also be reluctant to take advice from a financial planner who lacks the necessary knowledge and expertise to deal with your money.  This past week, a large number gathered in Vancouver for the 13^th Annual Canadian Financial Planners Conference to learn from economists, tax experts, and estate lawyers. We learned about the mathematics behind annuities, cross border planning for Canadians and Americans, and managing market volatility. We also networked with fellow colleagues from across Canada to see what’s working for them so we can mirror their practices.   As planners, we want you to see us as the experts who are willing to build a trusting and lasting relationship with you and walk you through your life challenges so you achieve your goals and relieve your stress. The decision is yours whether you are willing to enter into that relationship with us.   

To Whom Do You Listen

When seeking financial advice, many people have admitted asking their friends, family, or colleagues what they have done.   It’s not uncommon to scout for information from the people with whom you feel most comfortable. However, is this really the best way to get financial advice? 

Advice about specific topics is best sought from professionals who have experience and education in these areas.  I am not saying all advice from people who don’t work in the financial industry is necessarily wrong advice; but consider that what their advisor told them may not work for you. If people receive only a tiny snippet of your story, you may receive inappropriate advice.  

One size doesn’t fit all.  Because some financial strategies may work well for some, doesn’t necessarily mean they’re right for you.  An analogy to help understand this concept can be made to clothing sizes. We do not all wear the same size.   What might be an ideal shoe size for you, size 6, doesn’t mean it will fit your friend’s size 9 ½ foot.

Think about these three scenarios:

If you opt to follow your colleague’s advice, some decisions may be irreversible.  For example, when selecting your pension options with specific guarantee periods and survivor benefits, these decisions, once made, are final.

If you take your friend’s advice, perhaps it doesn’t match your goals, dreams, and aspirations.  The advice you receive is more apt to suit theirs.

If you heed your family’s advice, who will monitor your progress to ensure you are on the right track?  Will you continue to check with them for follow-up guidance?

So if you shouldn’t get financial advice solely from family and friends, who can you look to to be your teacher? CERTIFIED FINANCIAL PLANNER^® professionals have taken the appropriate courses and gained meaningful job experiences to qualify them to provide sound advice.  The comforting news for you is knowing that Certified Financial Planners follow a code of ethics ensuring your interests always come first.  

Information on the various topics related to personal tax planning, insurance, investment, retirement and estate planning is so vast.  Your “go-to-person” should have a strong understanding of these topics to help you make important life-planning decisions.     Who better than the people with financial knowledge to help you make decisions about:

• taking Canada Pension benefits at age 60 or 65;
• using Registered Retirement Savings or Tax Free Savings;
• starting withdrawals from Registered Retirement Income Fund (RRIF) earlier than age 71;
• paying down the mortgage or making contributions to Registered Retirement Savings Plan (RRSP);
• choosing the best options for pension benefits?

Financial Planning Standard Council (FPSC) is a not-for-profit standards-setting and certification body that develops, promotes, and enforces professional standards in the financial planning field through Certified Financial Planner^®certification.  FPSC compiled a list of questions to help you determine whether your financial planner is competent and qualified to provide appropriate advice.  Click here for a list of ten questions to ask.  You are in the position to hire someone based on their credentials to do the best job for you.  You certainly want to be assured they are qualified to do that.