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What is the Best Approach for Helping Your Children Financially?

by FinancialFinancial Planning

There is no best approach when it comes to helping your children financially. It all depends on the personality of your kids and your own personal beliefs. We have outlined some suggestions you can follow on how you can support your kids while helping them learn how to spend, save, and invest money.

Saving for their own Education

You should encourage your child to take some of the earnings from their high school job(s) and save them so they can use it towards their education. Even if you can afford to send them to school on your own, having them learn how to budget and save can be a very rewarding life lesson for them. Giving them the opportunity to achieve a real-world goal can help them build positive financial habits that they will use for the rest of their life.

Teaching through Allowance

Paying your children an allowance doesn’t just have to be about providing them spending money. It can be used as a learning opportunity to instill positive financial habits. If you provide them with a decent allowance, you can encourage them to save some of it in their own bank account to watch it grow and gain interest. Allowances should only be paid if the child performs their weekly chores, and extra money can be given out if they go beyond the call of duty. This will give them a sense of earning and hopefully teach them that hard work has its rewards.

Avoiding Affluenza

 As a parent, you want your children to thrive and to have the best life possible. This is why it’s so tempting to make their life easier by providing them with financial support. Giving too much support runs the risk of “affluenza,” which is the loss of initiative and independence caused by receiving too much wealth without any work. This may cause your children to begin feeling entitled, which is causing more harm than good. If your children do need your help, you should only help them with essentials, such as emergency repairs or education. It’s best not to give them large lump-sums of cash as a gift or as their inheritance. Consider giving smaller monetary gifts over time.

 No matter which approach you choose when it comes to aiding your children financially, you can count on The Beacon Group of Assante Financial Management, Ltd. to guide you through the process and help you reach you goals.

 

 

retirement planning calgary

Understanding Retirement Planning Strategies for Couples

by AgingFinancialFinancial Planning

The statistics show that approximately half of all Canadian couples near their retirement age expect to retire at the same time. Expectations don’t always meet with reality though, as only about 30% of these couples actually retire at the same time.[1] This discrepancy indicates that a lot of Canadian families are choosing to take the synchronized approach when they should’ve considered the relay approach. Here are the differences between the two. Use these explanations to determine which approach is the best for you and your spouse.

The relay approach

 The relay approach is when one spouse retires before the other. This can be done for a number of reasons, such as one spouse being attached to their job, or if there is a significant age difference between spouses. In some cases, the relay approach becomes planned for you. For example, if one spouse needs to retire earlier than expected because of health issues, you will have no choice but to retire at different times.

There are a number of financial benefits to retiring at different times. With one person working longer, a couple can increase their retirement saving to delay drawing from their nest egg. They can also continue to receive group insurance benefits from the employer of the working spouse. This can also delay the start of Canadian Pension Plan payments for a higher pension.

The synchronized approach

 When you plan on retiring around the same time as your spouse, it is called the synchronized approach. The first obvious benefit is being able to enjoy your retirement together as the next step in your life begins. To maximize the number of years you can spend together, you may consider retiring early, as long as you have planned for it and have enough retirement savings. If retiring together means one person is 75 and the other is 65, the synchronized approach may not work out because the older spouse may not have the energy or fitness to pursue an active retirement.

 The most important part of your retirement plan is communicating with your spouse about your retirement goals and needs. Once you have those things settled, the next step is to speak to a retirement planning specialist at The Beacon Group of Assante Financial Management, Ltd. They can help you put your retirement and financial plans in place so you can retire when you want to.

[1] Statistics Canada, “Retiring Together, or Not,” Perspectives on Labour and Income, 2008.