When it comes to looking after the family, planning for a safe financial future is vital. A key thing to remember is that it is never too early to start. The most obvious long-term financial goal is saving for retirement, with people encouraged to find a job with a secure pension plan as soon as possible; but separate from retirement, other long-term financial commitments should also be planned.
For instance, if the plan is for the younger members of the family to attend college or university, there are financial considerations because post-secondary education in Canada does not come for free, with various fees charged by colleges and universities to cover the costs of educating students. There are tuition fees and student activity fees to take into account, not to mention the general costs associated with sending young people to college that may have to be borne by the family.
When the children are educated and have “flown the nest”, it might be time for an overdue and deliberately long vacation, perhaps even a trip around the world. Saving for traveling a little bit at a time means that dreams of an ocean cruise through the Panama Canal or a relaxing and extended holiday on the beach can be fulfilled.
In terms of retirement itself, putting plans in place to maximize an individual’s or family’s wealth is critical, and this is something that Doc Gallagher (W. Neil Gallagher), founder of the Gallagher Financial Group and host of radio programs Your Family Matters and, previously, The Money Doctor, emphasizes, with a focus on long-term health costs and estate planning needs for the benefit of the next generation.
Financial planning for the family is all the more important in a particular Canadian context. The incomes of middle class Canadian families have been lagging behind those of other demographic groups in the country owing to modest increases in wages, according to statistics compiled for the finance ministry in 2013. Although the average annual wage earned by women has seen a steady increase of 28 percent from 1976 to 2010, as a greater number of women entered the labor force, the average annual wage for male workers fell by 19 percent in real terms for the period 1976 to 1996, recovering slightly by 2 percent for the period 1996 to 2010. These figures suggest that middle class families are, in many cases, having to do more with less, strengthening the case for judicious and timely financial planning.
To get started with a financial plan, make a list of priorities and think about needs that will have to be met in the future. It is essential also to take into account insurance needs – health insurance, life insurance, and so on – and to factor these ongoing costs into any financial plan of action. A professional financial planner can be of considerable help in formulating an effective plan.
Securing the financial future of the family means being able to focus fully on what really matters – helping each other through good times and bad. The peace of mind that comes from careful, long-term financial planning can be of great comfort into old age.