There’s something special about the final days of the year. The idea of a fresh year ahead is exciting. I also love the opportunity to reflect on the year that is coming to a close. I try to spend one evening at this time of the year taking stock of what I accomplished, what I enjoyed, and what didn’t go so well. It’s a chance to pat ourselves on the back, feel gratitude and make a plan to change some things. For me, 2024 was a year of growth as I refined the focus of my business, achieved the Certified Financial Planner designation, and wrote a bi-weekly newspaper column, a task that really pushed me to take feedback and get better. I’ve learned so much from my fellow advice-only financial planners, studying for the CFP exam, and attending webinars. Best of all, I’ve had a ton of “on the ground” learning by working with clients.
It’s been a fun and fascinating year of having conversations with people. Hearing what folks are thinking about, what their hopes are, and what they worry about is the best thing about being a financial planner. It gives me a glimpse into the lives of others.
Let me give you a little insight into what other people are thinking about when it comes to their finances. Bear in mind that my clients are only a small sample of the population and that generally the people I work with are motivated to be financially healthy. There’s a whole swath of the country that doesn’t even consider talking with a financial planner – perhaps because they are just trying to get by financially, they have no interest in talking about money, or they can’t afford it. With that in mind here are the top questions and concerns from my clients.
1. Am I saving enough for retirement? Far and away, this is the number one question people are asking. Often folks are putting money aside in an RRSP or in their company pension plan but really have no idea if it’s enough. They also wonder at what age they can retire. Although 65 is the standard, I’m finding more people want to retire – or at least partially retire – before then.
2. Are we spending too much? Life is expensive, especially when you have kids. It’s easy to lose track of how much is going out the door each month. It’s pretty common for people to say “We make decent money but where does it all go?” The question of spending is usually related to “are we saving enough.”
3. I don’t know what I’m invested in and it doesn’t feel good. Most people who are saving for education or retirement are investing in some form. Often it’s with a financial advisor at one of the big banks or it’s in a mutual fund that they were sold at the bank branch. Usually people have no idea what they are invested in and that irks them. They also have a nagging feeling that they could be doing better.
4. Can we help our child down the road? Clients who have a child often want to be able to help them when they become a young adult, usually with a down payment for a condo or a house. (This is much more common when folks have one child than it is when they have two or more.) Often this stems from “My parents helped me so I want to do the same for my child” and sometimes it’s a fear that their kids will struggle financially. People wonder if they can afford to do this.
5. Should I pay down my mortgage? Many people hate having debt and want to get rid of the mortgage as soon as they can. Even with ultra-low mortgage rates in the 1.8% to 2.5% range, people still pay down their mortgages faster than they need to. Now that these mortgages are renewing in the ballpark of 4.5%, they wonder if they should take their savings and put down a lump sum. I always say there is the financial answer to this question (usually “no”) and then there’s the emotional answer (which every people must decide for themselves).
There are also common characteristics that I see over and over again.
In a couple, there is almost always one person who enjoys finances and one who doesn’t. Often one person manages it all, which can leave the other person feeling out of the loop and sometimes insecure about money. Or sometimes that person is grateful that they don't have to think about it (a great thing now but not so great if something happens to their partner).
People are scared of investing. They feel like the stock market is a black box and it’s intimidating. The result is that many people ignore the investing part of their financial lives or stick to using GICs or high interest savings accounts. Younger folks – those in their 20s – are much less afraid. They are more practical about it and are willing to open an online brokerage account and dive in.
Most people want to balance living for today with saving for the future. Although I occasionally meet folks with a significant scarcity mindset (“There’s never enough”) and folks with a spendthrift attitude, most people are somewhere in between. They want to go on vacation but they also want to feel secure about their old age.
Chances are, you see some of yourself in these common questions, concerns and characteristics. That’s because at its root, financial planning is pretty simply. Although it has complexities and there is a ton of detail when you get into the nitty-gritty, the foundation is knowing how much you spend, having a savings plan, and investing.
I hope you have some down time this holiday season, with time to reflect on the past year and look ahead to 2025. I’m here to help you with your money questions so reach out anytime. We can do a full work-up or just touch base for a tune-up.
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