Putting together a financial plan has so many benefits: it can clarify your goals, outline specific actions to take and show you what your financial situation will look like down the road. This is all great stuff – but it’s just theory until you actually put the plan in place.
This is where many people falter because it’s not easy. It takes time to execute on a plan and there are frustrating roadblocks along the way. People make mistakes and that can be discouraging. All of this is normal and is part of the financial experience. Don’t let it bog you down and stall out – fix it, learn from it, and move on. Just keep going! Despite my financial experience and education, I also face challenges when it comes to money. I make mistakes and feel frustrated too. * It’s not just you.
Becoming a financial coach as a second career means I bring my life experience to the job. It makes me a better coach because I understand the challenges of getting things done. I’ve been through many of life’s milestones, the same ones that many of my clients have experienced or will experience: starting a career, getting married, having kids, buying a house, and getting divorced. Over the past two months, I’ve experienced a few more of these big life events and I am continuously learning from them. The phrase “financial planning gets real” keeps popping into my head - the theory is great on paper, but executing it is a different story.
One of these experiences is being the executor of an estate. It’s one thing to read about the roles and responsibilities of an executor and answer some multiple choice questions on the financial planning exam but it’s quite another to actually find the right paperwork, figure out how to properly fill it out, and make sure you mail everything that needs to be mailed. It seems like every step has a small but frustrating roadblock. I’m pretty good at filling out forms, but it still took a lot of thought and some Googling to file the probate application. For people who don’t like paperwork, being an executor would be frustrating. I’ve also learned the importance of writing a rock-solid will. My dad’s situation is very simple, and yet there’s a small sentence in his will that leaves it open to interpretation – which in some families (fortunately not mine) could lead to strife. It’s important to have a good lawyer and give careful thought to your will.
Another milestone I’m facing is one that I discuss with many young couples: combining finances. Suddenly the advice I give others is what I hear myself saying to my partner as we are working out the details of how we will make the process as smooth as possible. Fortunately, much of what I suggest to couples who are just moving in together or are buying their first home together makes sense for us, like deciding on how you will each contribute to the shared expenses, opening a joint account for the house bills, and having a common credit card for shared expenses while keeping your own individual bank account and credit card to maintain some autonomy. Still, there are kinks and anomalies that need finessing.
The third experience I’ve had is about paying for education. My son Owen is in grade 12 and is looking at his university options. It’s such an exciting time. As he ponders schools and programs, I have been looking up the tuition costs. I’ve always assumed that my kids will need about $7,000 a year or so for tuition, maybe a bit more. Looking at the details has been a bit of an eye-opener. It turns out that a business degree costs more than that – at some schools a lot more. My younger son Ben is only in grade 10 but I suspect he might be interested in architecture. Gulp – have you looked at tuition for architecture? My somewhat carefully planned RESP balance is looking like it’s going to be a little short now. And that doesn’t even consider the fact that Owen mentioned McGill and Dalhousie, two schools that have the highest average tuition fees in the country, not to mention the cost of getting him there and back a few times a year. Education planning is going beyond the theoretical and getting very real.
When it comes to your finances, things aren’t going to be smooth. And that’s okay. As long as you are taking steps to be organized, doing some planning and generally staying on top of things, that’s great. Keep on going despite the frustrations – it’s worth it.
*For example, I over-contributed to my TFSA a few years ago, I’ve left off information from slips on my tax return and have been re-assessed, I entered a mutual fund order twice and was in overdraft, I’ve been late paying my credit card and was charged the interest…and so on.
Photo credit: Matthew Henry on Unsplash
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