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5 Times in Life you SHOULD Speak to a Financial Planner

Life happens. Sometimes life is great and other times …. not so much. Here is a list of 5 times Life Happens and you should speak to a financial planner

You got married, separated or divorced

You decided to share your life with another person. You also decided to share your income and debt and responsibilities.

A financial planner can show you how to manage your cash flow, reduce your debt and save for when you’re both old and want to travel the world. They can show you what will happen if one of you is sick or injured (or dead) and how to protect your income with insurance.

On the other hand, you decided that person wasn't the one for you. Now you have to get by on one income, (possibly) more debt and (possibly) extra expenses. You may have to split up some of your assets too.

Here, a financial planner can help you plan your cash flow so that bills are paid and you can maintain some semblance of the lifestyle you are accustomed to.

Someone close to you died

If you have had a death in the family, you may need the help of a financial planner to help you manage your relative’s estate.

Having a financial planner help you through this tough time can alleviate some of the financial burden. There can be significant issues and tax implications that come along with winding up investment accounts. If they had a will, there may be discrepancies between it and the named beneficiaries of registered assets and insurance policies. If they DIDN’T have a will, see my last post for what can happen there.

Speaking of someone close dying…

You have come into a lot of money

In a recent survey, over 17% of Canadians responded that they are counting on an inheritance to help fund their retirement. With the boomer generation aging, there is going to be a lot of money flowing into the next generation. Now, how they handle that new increase in wealth is what is concerning.

We have all heard about the professional athlete or movie star who makes millions, only to claim bankruptcy a few years later. Just because you didn’t have to work for this money doesn’t change its value. Would you buy that Porsche before? It still costs $90,000 whether it comes from money you make or money you inherit. Focus should be on the long term. Get that all settled and then sure, buy a fancy German automobile.

You (or your spouse) changed jobs or occupation

Gone are the days when you go to school, get a job right away and stay with that company until you’re 65 and get a lovely gold watch. In this world, you can have many different careers before you stop working. I’ve done it, and I bet most of you aren’t in the same job you started in years ago.

Maybe you left for more money, or more responsibility (or less), or better benefits. Either way, your new job will affect your plan. For starters, employment benefits are not portable; if you leave the employer, you leave the benefit. You could have been counting on that group life policy to cover the house, or the disability policy to cover you in case you can’t work. And then there is the income, be that up or down, your outlook needs updating.

You (or your children) recently had or adopted a child

Take it from me, kids are expensive! Having a child (or 4) is not only hard on you physically and mentally, it can really put a strain on your cash flow. From formula and diapers in the early years, to clothes you just bought 3 months ago not fitting, to “Dad, my teacher says I need a new iPad for class”. And they eat. A lot.

Having sufficient wiggle room in your plan is key to surviving children, especially if a sudden money problem arises (car needs fixing, a new roof, junior played baseball inside).

After you spend the money to raise them, you’re going to need to educate them too. In Canada, we have a pretty good set up with the RESP. You add money, the government adds money, the kids take it out (maybe) tax free to pay for school. Win-win-(maybe)win!

This is by no means an exhaustive list. There are many more times in life you need to talk to someone like me. Not sure if a decision you have to make will affect your finances? Best to give me a call and see. What’s the worst I can say?

Kenenth Coombs CFP CHS RRC

Ken has 12 years experience in the financial services industry, is a Registered Retirement Consultant and a Certified Financial Planner. Ken has written financial planning columns and has been a guest on financial radio and podcast programs.

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