Building your Financial
Success
With Alain Aube
Planning for financial success
The
Special Importance of Financial Planning for Women
WOMEN ARE BECOMING INCREASINGLY AWARE of
the importance of financial independence. No matter what your current
status is - single or in a long-term relationship, with children or
without - it's essential that you prepare for your financial future.
Although the financial inequities between
the sexes both in the workplace and in relationships have lessened in
recent years, women still are at risk. They often earn less money than
men and can be financially vulnerable when marriages end, spouses die or
they become the source of financial support for children. There is a
growing awareness among women of all ages of the need for financial
security.
No matter what your situation, a financial plan can be your roadmap to
that security. Simply put, a financial plan is a way to establish
financial goals and develop a strategy to meet those goals.
There are four basic elements in a
financial plan.
First, determine your current financial position - your net worth.
Second, look at your spending patterns and develop a budget that you can
live with.
Third, set your financial goals and priorities.
Finally, devise a savings and investment strategy that allows you to
reach your goals.
Still not convinced that you need a financial plan? Here are six good
reasons why women should map out their financial future:
• If you are married, a plan can minimize financial turmoil should your
marriage end.
• Women live longer, on average, than men, so your retirement savings
will need to last longer. If you're married, you should also be prepared
for the financial challenges that come with the death of a spouse.
• On average, women earn lower incomes and are less likely to be part of
a company pension plan. Therefore, planning for retirement savings
should be an early priority for women, who may have to save longer to
provide an adequate income when they leave the workforce.
• Women usually end up with custody of children when relationships end,
often resulting in a significant financial burden.
• You'll accumulate more wealth with a well thought-out financial plan.
• If you've taken time out of the workforce to raise children, a
financial plan can help you catch up on your financial independence.
When should you get started on your plan? The sooner the better. With
RRSP and income tax deadlines looming, this is the ideal time to give
some thought to your savings, spending and investments.
You can use your income tax records and receipts to track your saving
and spending patterns, and to get started on a budget if you don't have
one. And while you're planning your RRSP contribution, take some time to
see how your retirement nest egg is doing and what steps you'll need to
take in the future to guarantee a secure retirement.
Your best bet for getting started on a comprehensive financial plan is
to talk to your financial consultant. He or she can show you how to set
your goals and develop a strategy to help meet them.
