No, not the creepy clown from IT, more like Uncle Pennybags. As we head into the holiday season, it’s easy to fall into a spending spree with no regard for your financial state. In a time when wish lists are pervasive and the urge to impress is rampant, it’s more important than ever keep an eye on your bank balance. Continue reading
A couple of weeks ago, we talked about how to financially prepare for divorce. Facing the topic head-on, while it’s a tough row to hoe, knowing you’re not alone can help. According to Stats Canada, 43% of marriages end in divorce before the 50th anniversary. Reading that, you may think “Who would divorce after being married that long?”. The answer is anyone. Life affects everyone and when you share your life with someone, it affects them too. While knowing this doesn’t make preparing for the emotional impact of divorce any easier, planning your financial decisions ahead of time can put you in a better position to move forward. In life, moving on is the key to moving forward.
Currently, there’s a lot of talk about what may happen if interest rates rise. So, chances are, you’re looking for tips on how to protect your income and balance your portfolio.
However, capturing money that’s wasted on inefficient interest payments should always be a priority. When it comes to cash flow planning, that’s one of the main ways people are able to save money and free up income.
- Mortgage myopia. You may assume your interest rates and mortgage payments will remain the same over a long period of time, or you may not know how to plan for fluctuating rates. As a result, you could fail to build interest rate-movement assumptions into your financial plans and projections.
Women usually have a lot of priorities they need to deal with and unfortunately financial planning does not always appear at the top of the list. Finding the time to focus on finances is often a challenge in a woman’s busy life. According to a recent Fidelity Investments survey, if women were given one additional hour to devote their time just on finances, they would work on their budget and learn more about investing.
When it comes to money, women’s main concern is working on a budget to lower debt and save more money. The second concern is to develop better skills in investing, and third is to create a financial plan and investment strategy.
It’s imperative for women to take an active role in financial planning. There is a very high probability of women being solely responsible for their finances at some point in their lifetime due to divorce or outliving a spouse. Nearly one-quarter of women say they don’t partake in financial decision making.
“Women can make changes to their finances such as lower debt, save money and become good investors. Making changes to your financial plan doesn’t have to be as difficult as it is perceived to be,” says Doug Buss, President, YourStyle Financial.
When a sudden surplus of money comes in, there are a couple thoughts that go through one’s head.
The first, regardless of your financial situation, is to treat or “spoil” oneself outside the bounds of your regular spending habits. Look no further than postings on social media around the time that tax return cheques roll in, where people will proudly proclaim that the three-figures they got back from the government are going to a new TV or a trip south of the border.
Those who are more financially minded, however, will look to their current bottom line and make a decision based on that status.
And here’s where the real questions start to perk up – do I invest or do I pay down a debt.
It’s a real puzzler.
Putting the money into the markets or even into a TFSA or RRSP does give you a little bit of confidence for your future – you’ve been able to do a little bit more for your 30-years-from-now-self and/or family.
The other option is to put that money against debt, be it loan, line of credit or mortgage which solves your current financial issues, or at least makes a dent in the bill you face over a 20-year span.
The reality is that either of these scenarios – or to throw a curveball and split the two – do more for you than your short splurge from a pure financial point of view. Factor in the little bit of emotional relief that comes with easing your debtload or increased security down the line, and you can start to see the benefits of putting that sudden rush of funds in the bank rather than in retail.
For more financial tips from the planners at YourStyle, contact us today.