One of the most common questions I am asked when engaging with a client for the first time is how often should we meet. Initially, as we draft their financial life plan, we meet more frequently. Once we have the plan established, the answer, although dependent of the client’s need and desire, is at least once per year unless there is a change in your lifestyle or you incur a life event.
We recently started to ponder the term “life event.” What exactly constitutes a life event? Words like retirement, investing and insurance are usually associated with the need to refine our financial life advice. But what about topics like birth, relocation or launching a business? It’s astounding how many common life events are overlooked that could greatly benefit from professional financial life advice.
Here are some life events to help you recognize scenarios in which you or your family and close relations might benefit from meeting with a Financial Life Planner.
Birth
According to the Federal Government, the predicted cost of raising a child from birth to age 18 was approximately $245,000 in 2013. That’s not including the cost of University. The word “pregnant” is rarely associated with things like post-secondary planning or life insurance, and while perhaps money is not your first thought after receiving the exiting news, it certainly shouldn’t be your last. When the baby arrives, life inevitably gets more complicated. It could be worth it to fit in some financial life planning alongside baby naming or stroller shopping. You might want to open a RESP, for example, to start saving for University, as well as take out additional life insurance policies.
Graduation
Graduates might not think they have enough money to talk to a Financial Life Planner. But they face key money choices as they start repaying their student debt with “starter” jobs. They could use help prioritizing payments for credit cards and student loans.
New Job
Parents, consider paying for a Financial Life Plan as a gift to your child (and to yourself, since it makes your child more independent). Kids might act like they just want to have fun, but they often need – and even want – guidance during this key life transition.
Engagement
Many young couples need help managing debt, joining assets, and have tons of questions regarding insurance, home ownership, and their overall future together. Not to mention, the average wedding cost in 2013 was a whopping $29,858, not including the honeymoon. Perhaps providing the name of a trusted Financial Life Advisor to the new couple will be the best engagement present you can offer.
Marriage
Couples might be marrying later these days than they used to, so when they finally do tie the knot, combining finances can be even more complicated. Prenuptail agreements might be a buzzkill, but they can help protect each person’s savings and prevent any misunderstandings. They are especially important if either member of the couple is bringing financial responsibilities like children into the marriage.
Pay Raise
Pay raises are typically small and incremental if they come at all, so getting a big raise is cause for celebration. They also mean it’s time to do some planning to determine how much you should be saving for the future, too. It might be time to bump up your retirement savings.
Career Change
Congratulations are certainly in order, but a new job also means possible insurance questions, a group RRSP or pension transfer, and perhaps even relocation. While you’re busy learning the ropes of a new company, let a Financial Life Planner who understands the process work behind the scenes to make the transition easy.
Relocation
Canadian provinces can be as different as moving to another country. Tax rates differ and cost of living can shift dramatically. There are scores of moving-related expenses. This might be the time to see a Financial Life Planner who can provide one-time consultations on the things to consider if you are relocating to another area in Canada or moving out of the country.
Owning a Business
Their phones are never turned off, their inbox is constantly full, and most have never heard of a lunch break. Business owners are truly a unique group of individuals. They have recognized their passion, worked extremely hard, and hopefully created a successful business or product. Because entrepreneurs tend to deal with very particular financial matters and have very specific concerns, its key for them to choose a seasoned Financial Life Planner that can relate to their hopes and pacify their fears.
Job Loss
Emotions often run high when your employer offers a big severance package. Some people want to call a lawyer to get more, others a travel agent to get out. It’s important to understand the complex financial issues associated with severance packages. Most plans are immediately taxable, for example, and you want to make sure you understand all the fine print before you sign on the dotted line.
Buying A Vacation Home
Summer rental homes can represent bliss; a great escape you’ve had every year. Then, the landlord offers a sweet insider price you can’t refuse. Summer homes are often bought as emotions rise at the end of the season. But purchasing a vacation home – especially one that requires rental income to finance – can be a complicated long-term commitment. A Financial Life Planner, not a real estate agent, can tell you what to consider.
Inheritance
Baby boomers stand to inherit significant wealth in the coming years, and receiving lump sums also carries with it financial responsibility. It can raise questions about spending habits, charitable contributions, tax payments and a slew of other concerns. You might want to get help from a professional as you figure out how to handle the money.
Divorce
The decision to separate can be one of the most difficult a couple must make. If a house, children or even pets are involved, the situation is propelled into an even higher level of difficulty, and must be handled with extreme care and attention. While many recognize the need for an attorney, it’s also essential to receive professional financial life advice to help support yourself, your spouse and your family now and in the future.
Retirement
Retirement is considered the pivotal financial moment in a person’s life. If you haven’t already worked with a Financial Life Planner to figure out your plans and budget, then now is the time. In fact, financial life advisors urge even clients in their 20s and 30s to start planning for this major life transition, to make sure they’re saving enough along the way, during their peak earning years. It’s also a good time to reflect on what you want out of the final third of life.
Death
Losing someone is difficult enough by itself. If a will is not in place, or if money is not available to cover funeral costs, it can make an already distressing situation even more heartbreaking. By working with a Financial Life Planner to ensure that all paperwork, insurance issues and after-life decisions are agreed upon and securely in place, you’ll be left with peace of mind and the necessary time needed to mourn their passing, and celebrate their life.
Although retirement planning, investment advice and estate planning are all recognized as crucial pieces of your financial wellbeing, it’s also important to recognize common life events that warrant proper financial life advice. Being financially prepared is the best defense against the expected and unexpected experiences that life throws your way. Find out more. Contact Northern River Financial at 1.855.5NRIVER or info@NorthernRiverFinancial.ca. It’s just part of the way of Keeping Life Current.
