Due to Canadians' rising debt levels, our federal government is looking at ways to protect future generations from living in the red. As part of this new proactive approach, the government has considered providing youth with some well-needed (and long overdue) financial literacy lessons in the classroom.
Nice initiative, but what about us who finished school, let's just say, a few years ago…huh? What about us?!
Enter your financial advisor
At any age, a financial advisor can provide you with the advice and tools you need to make smart financial decisions. But since we all have our own set of excuses as to why now is "not the right time" to reach out for financial guidance, we're going to show you how an advisor can help you whether you're a 23-year-old grad or a 63-year-old on the brink of retirement. [More: What to do when financial advice goes wrong]
Here goes …
In your 20s
ü I'm too young.
ü I can't afford it.
ü I'm not making enough for anyone to help me.
ü I have too much debt.
ü I don't need to worry about it yet.
Perhaps in your twenties you are less concerned with paying into a retirement plan and more concerned with paying rent, but a financial advisor can help you create a plan that will set you up for future fiscal success. [More: Help your advisor help you: 8 tips to being a great client]
Advisors not only help with the services you'd expect, like investments and retirement planning, but also with some you might not.
A financial advisor can help you:
ü Gain control of and manage your debt.
ü Explain the financial products you currently have (like a matching contribution plan with your employer).
ü Determine gaps in your current portfolio (for example, are you covered in case of critical illness?).
ü Help you define what you want to work toward for your financial future.
Building a relationship with a financial advisor in your twenties also allows you to use their professional advice to build good financial habits early on. An advisor will coach you on where your money is best used, as well as which financial products would be of benefit to you.
And while you may not have a lot of money for traditional investments now, a mere $50 monthly RRSP contribution in your twenties will really pay off down the road. Can you say 'early retirement'?
Define what financial success is to you and find an advisor who sees you as the money savvy future investor you truly are and not just as someone with an entry-level paycheque. After all, you want an advisor interested in a long-term financial relationship, not just a one-product stand. [More: Gekko debunked: 4 things you don't know about financial advisors]
In your 30s and 40s
ü I'm doing fine managing my own money.
ü I can't afford it.
ü I'm covered at work.
ü I already have a good plan in place.
ü I have no time to discuss my finances.
ü I can deal with the bank.
ü I don't want to talk about it.
After a decade of (hopefully) excellent financial management, it's time to re-evaluate your plan to reflect some major life changes. It's likely that the financial plan you created in your twenties doesn't account for the higher income, additional assets and potentially growing family that usually come along in your thirties and forties.
At this life stage, a financial advisor can:
ü Provide guidance on how to plan for your children's education.
ü Advise you on how to manage retirement planning.
ü Help you break through the scary financial situations most people don't want to discuss, like what you'd do if anything happened to you or your partner.
Attempting to balance all these major monetary decisions (and still enjoy some of your money) is a challenge for most, which is why an objective third party (read:financial advisor) is crucial during this time in your life.
Ensure that you find someone who is more interested in listening to your unique needs than in offering standard guidance. It's important that you understand and are comfortable with your financial plan so you can spend your time enjoying some financial freedoms.
In your 50s and beyond
ü I'm too old.
ü I've been managing my own money.
ü I'm no longer working so it doesn't matter.
ü It's too late to change anything.
ü I'm already retired.
Despite making it to (or very close to) retirement, there are still plenty of financial decisions to be made and an advisor can help you avoid potentially devastating financial missteps at this time of your life.
For example, while you have hopefully done a good job at saving up to this point, it's all too easy to justify changing your spending habits because of your successes. Having a financial advisor who can help to inform your spending and saving habits will allow your hard-earned money to last. [More: Not a millionaire? 5 ways to find great financial advice no matter the size of your portfolio]
Advisors are also able to:
ü Determine and reinforce how much you really need to retire, based on your expected retirement lifestyle goals and income needs.
ü Create a retirement spending plan for you, transitioning you from saving to spending in your retirement years and ensuring your income will last as long as you do.
ü Explain some of the more confusing elements of estate planning (like tax costs for withdrawing your funds) that can be costly for the uninformed.
ü Help you leave a lasting legacy through activities like planning for a charitable contribution or by ensuring the financial protection of your loved ones.
It's never too late to build a relationship with a financial advisor but it's always too early to end one. Also, don't hesitate to involve your family to set them up for the lifelong financial success your advisor helped you achieve.
Age is just a number
A financial advisor is an objective, professional third party who is able to help you manage your money and enhance your financial literacy. They are a source of guidance, experience and understanding that can encourage financial security for you and your loved ones throughout your life.
So drop the excuses and pick up a financial advisor, because when it comes to financial planning, age is just a number.
GoldenGirlFinance.ca is a free personal finance and education site for women.
Nothing contained herein is intended to provide personalized financial, legal or tax advice. Nothing should be construed as an offer to sell, or a solicitation of an offer to buy a security, a recommendation for any product or service by Golden Girl Finance or any associated third party, or a suggestion regarding the purchase, holding or sale of securities. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.