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Are you ready to be the family financial guru?

by | Apr 10, 2017 | SELF-PUBLISHED

Here’s what you need to take on that role

You’ll probably know of friends or colleagues who are unable to balance their chequing account on a monthly basis. I’ve had clients come to me who regularly simply close their out-of-control (and usually overdrawn) chequing accounts and open a new one. Some have personal accountants (a fairly costly way of balancing your chequebook). Others (not many) use software like Quicken. Most just give up and hope for the best (I can almost see heads nodding in agreement). That’s not actually “financial planning” in any recognizable sense of the term.

With the kids going back to school, and everyone getting back down to business after summer vacations, money matters tend to take centre stage again, like it or not. The fact is, our Western 21st century society demands a level of financial literacy that often isn’t taught in the formative years. Yet to achieve even a minimum level of financial security, you have to have a grasp of the rudiments of personal finance.

Some have even asked me “Why bother?” The money comes in, the money goes out. It somehow all works. But that’s really relying on a false sense of security. As you go through life’s stages, your responsibilities increase. Marriage, children, family, home, career, retirement, aging, health – all are contingencies that ask for some sort of financial response.
So if you’re at the stage where it seems increasingly as if you’re in charge of the family finances, here’s a quick guide to what it takes to be the family financial guru.

Financial planning

If you haven’t done so already, find a quiet time to sit down with your significant other and get to know yourself. Assess or reassess your life goals, values, investment goals, and financial objectives. Are you looking for something as lofty as early retirement. Or perhaps you really just want to get the mortgage monkey off your back. You might want to save for a cottage. Children’s education. There are plenty of long-term and short-term goals to consider.


If you have an investment portfolio – even if it’s a mutual fund or GICs or savings bonds – you’ll want to evaluate that in light of your financial goals. A good financial plan includes a detailed statement of investment objectives, defining the optimal allocation of your investment assets. Do you have an investment strategy? Do you invest or set aside investment savings every month? I’m not going to wag my finger and say, “You should.” But if you have set out longer-term life objectives, how will you achieve them? (Winning the lottery is not an option.)

Protecting what’s important

I understand – no one likes to talk insurance. But the fact is insurance is a critical part of your overall financial plan. And all too often, we have too much in some areas, too little in others, and we’re typically paying too much. To get the optimal coverage (for example, life insurance to protect your family, extended health care, disability and critical care), analyze your current protection, including all employment coverage and benefits, and assess your true needs. You’ll quickly see if you have too much (a fairly common situation for clients who first come to me) or too little coverage.

Tax planning – keeping what’s yours

You are legally entitled to arrange your affairs to pay the least amount of tax. In fact, you’d be foolish to do otherwise. Tax planning is complicated, and usually requires expert help. However, you can analyze your current family tax situation to see if you’re taking advantage of all personal and family deductions, credits, and writeoffs available (most of this information is widely available through tax-planning websites of major accounting firms). But you may also be missing major tax-planning opportunities. This includes specialized tax-minimization planning for those who are business owner/managers, professionals, senior executives, and self-employed. It’s here you need expert help to take care of all the details and make sure you don’t get into hot water with the Canada Revenue Agency.

Giving your kids a head start in life

The facts are frightening. A four-year university education currently runs about $64,000 at a minimum by the time you factor in all the costs of tuition and books, residence, travel, and living expenses. In 10 or 15 years, some estimates put it at $140,000. Do you really want to saddle your kids with that kind of debt on graduation? Of course not! You want to give them a head start in life. A cornerstone of family financial planning is to start saving for your kids’ post-secondary education with tax-efficient plans like Registered Retirement Savings Plans and Tax-Free Savings Accounts. And the sooner you start, the better, so that you get the full benefits from the magic of long-term compounding. Even putting in a little every month is better than doing nothing at all.

Estate planning

As the chief family financial planner, you’ll have to address this issue sooner or later. But making wills is only one part of an estate plan. Other key items could include trusts, registered accounts, and insurance policies. All of these elements, and more, go into creating an estate plan that provides for your family and determines how your assets are transferred to the next generation. Draw up a checklist of legal documents and items that have an effect on estate planning, including wills, insurance policies, RRSPs, trusts, and so forth. If your list is blank, you need to do something – pronto! At the very least, consult a lawyer to have wills made for you and your spouse. Then move on to some of the other items.


So are you ready to steer the family financial ship? I’d be surprised if you were. To be fair, most of what I’ve outlined here is beyond the scope of a single person to handle. You may already have a full-time job. And that’s in addition to your other full-time job if you have a growing family. What you really need to do is to determine when and from whom you need to get competent financial planning advice and help. That’s where your various experts can lend a hand – lawyer, stockbroker, insurance agent, and so on.

But to quarterback all these experts (and their sometimes conflicting advice), your best bet might be to start with a Certified Financial Planner, who in fact does this stuff for a living (full disclosure: I’m a financial planner). But don’t just take my word for it. Do you own research. To find a planner, speak to friends and colleagues who might be using one, to get a referral. Or check the Certified Financial Planners’ website for more information.

© 2017 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice. Securities mentioned are not guaranteed and carry risk of loss.

© 2023 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice.

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