It’s the time of year when we clean out the gardens, the garage and the gutters but it’s also a good time to take a look at your finances. Your taxes are done and now is the time to take stock of where you are, where you want to go and how you’re going to get there.
If you have a financial plan in place it’s a good idea to review it each year to see if it is working for you. If you don’t have a plan, you should. A financial plan is essential even if your needs and desires are few.
Plan or no plan, it all starts with your objectives:
Identify your goals
If you are working towards established goals, review them and the progress you are making. If you have yet to set goals, consider your entire situation (family, business, leisure, retirement) and establish goals for each.
Has your situation changed?
A job change, divorce, a new baby or moving can alter your income and your lifestyle significantly. You may need to adapt your budget, your spending, your savings, and your investments.
Protect your assets
Review your homeowner’s/renter’s insurance, health and auto insurance and don’t forget to protect the greatest asset of all – your income earning ability – with long-term disability insurance.
Prepare for the unthinkable and the unexpected.
Review your will and your estate plan and if you don’t have one, make one regardless of your age. Do you have a contingency/emergency fund? You should and it should reflect the value of your assets.
Evaluate your investments performance
No matter what size your portfolio is, you should review the performance of any investments you have. If you don’t have any investments, consider investments with guaranteed returns like GICs and term deposits as a way to start a portfolio.
Evaluate your debt
Too much debt will overwhelm any financial plan. If you are spending most of you income servicing your debt, you need a plan to retire that debt before you can look at a larger financial plan.
Review your retirement plan
A significant number of Canadians have no retirement plan and no company pension. Ensuring you have sufficient funds for a comfortable retirement takes time so a plan is crucial.
Don’t get overwhelmed – get help
If you have a financial plan and just want to check the numbers, Your Credit Union has a number of tools available on their website. Loan and Mortgage Calculators can help you to determine what you can afford or what you still owe. A Retirement Planner is available to quickly assess the savings you will need to retire comfortably and the Retirement Income Fund Calculator will show you how much you need to contribute to meet that goal. There’s also a calculator for Tax-free Savings Accounts, which are an excellent vehicle for shielding your investment from taxes.
Get advice you can trust
If you have no financial plan and you just don’t know where to start, Your Credit Union has financial planners that can assist you. At YCU we exist solely to help our member-owners achieve their financial goals. We have no mandate to maximize revenue when we are giving advice. This means that our member-owners get advice they can trust and rely on. We enjoy a close relationship with our member-owners and we get to know their aspirations and goals. We can provide innovative solutions because we have the flexibility to look beyond credit scores to the character and circumstances of the person we are trying to help. It is so much easier to treat people with honesty and integrity when you are not trying to make money from them.
If you would like help with you financial plan you can give us a call at 1-800-379-7757 or email us at email@example.com. Or better still, drop into any of our branches, we would love to meet you.
Guest post to Crystal Clear as Mud written by Your Credit Union