Making New Year’s resolutions can be a learning experience for us all. It provides an opportunity to reflect on our future and our priorities.
My theme this year is governance. How do we manage our financial planning goals? And how do our actions affect those we love?
Consider all aspects of your financial life and look at the potential implications for others.
For example, many families take advantage of the Registered Education Savings Program (RESP) to save for their children’s postsecondary education. That is a good financial strategy because there are government grants available, as well as favorable tax implications.
From a governance perspective, consider expanding the use of an RESP from a savings strategy to a learning experience for your children.
Every year, when your child is ready, explain to him or her that continued education is expensive and therefore establishing a regular savings program is beneficial.
Learning the importance of saving is a valuable lesson for your children. It is also an opportunity to convey your family’s values toward a continued education.
Another example is estate planning. Your actions, or lack of them, will have an impact on your loved ones, especially when it comes to having a will, a power of attorney for property, and a power of attorney for health.
When a person dies intestate, without a will, the provincial government gets to decide how the deceased’s assets are distributed. That can cause additional pressure on family and friends. It is an act of kindness to them to have your affairs in order.
The same kindness can apply to having both powers of attorney. The one for property covers financial matters while the second power of attorney addresses health issues.
Understanding the best ways to organize your financial planning governance starts with considering what and who are most important to you. That will vary depending on your values, and might change during your lifetime.
Everything we do in life has implications. And that is particularly true with financial decisions, or lack thereof.
As we head into 2018 take some time to review your financial planning goals and how they affect your loved ones.
