“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.”
― Suze Orman
For me, filing my taxes is not something which I look forward to but it can be a good time to review your personal finances and finance goals. For those of you who follow this blog, you will know that I had a marital realignment several years ago. Anyone who has gone through this process will know that the finances can be an issue, probably a gross understatement but for today, I will leave it at that. Figuring out your financial future can be daunting but a necessary task. One of the best pieces of advice I received (from another female) while going through this transition was to speak with a financial advisor. Even in this day and age, there are some staggering and scary statistics relating to females and their finances.
Did you know ?
•84% of Canadian women do not have a back-up plan for spousal death, divorce or separation
•45% of women aged 65 or older are divorced, separated or widowed
•Women live 5-10 years longer, retire earlier yet contribute 30% less to their RRSP’s than Canadian men
•90% of women will be forced to manage family finances on their own due to divorce or loss of a spouse
•48% of polled women do not have a financial plan of any kin
– deGraff Financial Strategies
I asked Catherine Ennis of Scotia Mcleod the following 5 questions:
1- Do females forsake financial planning? what pieces of advice would you offer women to ensure financial independence?
I would say that there are many females today who in fact do not forsake financial planning. I think they do a better job at it than men! Women tend to be more conservative than men. Women don’t mind asking questions. This is very good. To ensure financial independence, I would say: start early, but it is never too late to start. Start saving as soon as you can. Put a little (or a lot) away and don’t touch it. Pay yourself first – which means save before you buy the new I-Phone or take that holiday.
2-Most people carry debt such as credit cards, car, student loans and mortgages, What is the best strategy to manage our debts?
Pay them off as fast as you can. Having mortgage debt is normal, but always pay a credit card entirely at the end of the month and if you can’t, don’t buy the products!! Credit cards charge very, very high-interest rates. Even better, have the money in your bank account before you buy, instead of after. I know that might sound severe but a lot of people spend money they just don’t have. Be excited by seeing your investment savings grow instead of the temporary rush of happiness you get from a purchase. Have a goal of saving $50,000 or $100,000 no matter how long it takes and stick to it. If you put away something, with time, you WILL get there. Don’t buy items you don’t need. Don’t eat out a lot. Buy a good cookbook and learn to cook well. Your friends will be impressed and your potential (or actual) sweetie will really like it. And, while I’m at it, do not hook up with someone who doesn’t handle money well or spends too much.
My philosophy is to develop conservative, long-term investment strategies to help individuals retire comfortably. I believe in listening carefully to my clients to find out what their concerns and financial needs are, and work closely with them to ensure they save money and reduce their financial anxiety.
-Catherine Ennis, Director of Wealth, Senior Wealth Advisor
3- What advice can you offer parents to give children financially savvy?
My children still talk about (well, maybe sarcastically) the stories of the stock markets that I told them when they were quite young. I would say that they were designing a better bike in our basement (chose a toy they like), making them and then selling them. And, this was the ___________Company – replace the name with your child’s name. (Actually, this was the part they liked the best – having their own company with their name.) The bikes were so popular and selling so fast that they now needed to find a warehouse to make them because the basement was too small and they needed people to help make them because they had to make so many. That would take money – so, they would go to ScotiaMcleod for the money and now they would have shares that would trade in the stock exchange. As they got older and could understand more, I told them to keep at least 60% of the shares for themselves. I told it so many times, they caught on and it did help them to understand capital markets. You need to make saving something that they can relate to. You can’t just say to a child: you need to save. You can have them save for a new toy which is better than just giving it to them but, you also need to reinforce putting money in an account and Not taking it out. Play monopoly!
4- What pitfall should women avoid regarding their finances?
Never, I mean never, have joint credit cards. Have your own accounts. If you are married/in a relationship, run the family money; pay the household bills; know what is going on.
Know how much you are making and where it is going. Be knowledgeable about how much you spend and what you owe. There are a lot of people who don’t have a clue – I am not impressed. This is serious.
5 -How does a woman get started?
Understand what extra money is. You don’t need to spend everything in your wallet or bank account. There are discretionary purchases which are things you can live without, such as travel, eating out or a new outfit. There are non-discretionary purchases such as mortgage payments, hydro, taxes, cell phone etc. which always need to be paid. Be wise about what you spend money on. When you have extra money, put it away. Get into the habit of saving. You never know what is ahead. You may lose your job, get sick etc.
In conclusion, some people are interested in investing. Some are not. That is ok. That’s why there are people like me who enjoy investing and growing your money for you. If you have a hard time saving, have your bank/investment account automatically take out a certain amount each month. Make that amount high, not low. You can always lower it but you may be able to save more than you think. Keep track of what you are earning, spending, saving. Review this every 3 months – even if for only 5 minutes. Make wise decisions. Look after your money so it can look after you!
Catherine Ennis has been at ScotiaMcLeod for more than 25 years. She loves helping her clients and describes herself as someone who takes her clients “to and through” retirement. She can be reached at 613-782-6712.