Moneywise: Give your financial affairs a good spring cleaning

Countless Canadians across the country may have been busy recently giving their houses/condos/apartments or other living quarter’s a good spring cleaning, moving furniture, clearing out clutter, cleaning windows and generally sprucing up their lives.

How often, however, do we take the same approach to our financial lives?

“Now that RRSP and tax seasons are over, this is an ideal time to give your finances an overall review,” says Layne Choong, a financial adviser with Sun Life in Calgary. “It’s a great way to make sure you stay on top of things and see if there are any gaps or changes that need to be made to your plan.”

Choong advises people to take a holistic approach to their financial spring cleaning including estate planning, insurance, investments and daily finances.

Some recent studies have shown that Canadians generally are not doing that great a job with making proper end-of-life plans and getting all the legal and financial paperwork and information in order before anything happens.

Some recent studies over the last few years indicate that about half to two thirds of Canadians don’t have a will, and for many that do have one, it is out of date.

A will basically lays out who is going to get what from your estate, your directions for your funeral (burial versus cremation), your wants and desires as well as appointing Power of Attorney, an executor and/or guardian for children. A will that is out of date could be one which was written before, or which does not accurately reflect, your current financial, marital and family circumstances such as getting married or remarried and having children.

If you die without a will your estate goes to probate and the courts will decide how to split up your assets according to provincial laws of intestate succession, which may be in a way that does not reflect how you would have chosen to distribute your assets. It can take anywhere up to two years to probate a will and process an estate.

“This is an area that often is neglected,” says Choong. “I would really advise people to meet with an adviser to review your plan and make sure you are sticking to it. An adviser can help you see the big picture, identify any gaps or shortcomings that might exist and make recommendations.”

It’s a good idea to review your investments at least once a year to make sure the level of risk is still relevant to your current situation and you are saving enough for retirement and long-term goals.

As well, review your current, daily financial situation such as the amount of debt you are carrying, your income and expenses and other family obligations such as saving for your children’s education through a Registered Education Savings Plan (RESP) or other accounts.

Choong has a check list that she gives her clients to review and discuss during their spring cleaning meetings that includes identifying any major changes to their personal lives such as purchasing a home, any new additions to the family including grandchildren, changing jobs or any change in marital status.

She also lists a variety of topics that clients may want to discuss with her, such as their current RRSP, TFSA and RESP contributions, insurance coverage that would provide a lump sum of money in the event of illnesses such as cancer, heart attack or stroke, reviewing their financial plan to ensure it meets their goals for the future, and retirement income options.

For a lot of people, doing a financial checkup is not top of mind but spring is a great time to think about new beginnings, fresh starts and review where you’ve come from, where you’re at and where you’re going in the future in terms of your financial health.

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

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