Talking over your finances with an advisor can do more than help you manage your expenses and plan ahead.
You could also be pleasantly surprised.
Having a chat with a financial advisor about your money situation can bring great news, including the discovery that your finances aren’t so bad after all.
That’s what happened to me.
I had thought my financial situation was a disaster and had started to see Lotto 6/49 as my retirement income plan.
My wife and I knew we were spending too much, but we couldn’t seem to develop a savings strategy.
We decided it was time to find an advisor who would talk to us regularly, create a plan, and show us the “big picture.”
A new view of our finances
Victor Grieco1 is a Sun Life Financial advisor who lives a few blocks from my home.
We would exchange pleasantries as my daughter, my wife and I passed his office on our way to treating ourselves to an ice cream.
Vic never asked us to come to him for financial advice.
We liked his gentlemanly style and finally asked him to help us.
Vic collected everything related to our finances: insurance policies, pension and RRSP statements, mortgage payments, car payments and savings account balances (that was easy, we didn’t have any).
He also asked us to use his budget template to track all our income and expenses.
After compiling and analyzing this information, Vic gave us a binder with more than 100 pages of numbers, summaries and recommendations.
He called it a “living document” that he would work with us to update frequently.
Here’s what I learned from this process:
We have lots of room for improvement
Creating a budget was a great idea, proving what I’ve been told so many times.
We could clearly see where we were spending too much, and where we could easily make some minor sacrifices for major savings.
For example, instead of a late-night trip to a local restaurant to watch a hockey game I don’t really care about, drink a beer I don’t think is worth the price and have a snack I don’t need, I plan to pick up one of the many books on my reading list.
Our debt is manageable
At my current age, I’m worried about taking mortgage debt into retirement, if I retire at the traditional 65.
We found a way to make progress by setting up separate accounts in our credit line-mortgage: one to pay down the principal and regular bills and another that limits us to a set, monthly spending amount. National Bank of Canada and other financial institutions offer this method of paying your mortgage and other bills.
Retiring comfortably is possible
With some changes to our spending habits, I could retire in my mid-60s, if I choose to, and be able to cover our expenses.
My wife put our debit and credit cards away, so that now we’re relying only on our monthly allowance.
No more impulse buying.
We’re also reviewing our expenses to see if we really need everything we’re currently paying for every month.
Do we really need satellite TV, now that we subscribe to Netflix and can still rent movies that aren’t on that service? Is it time to get rid of our telephone land line, since we hardly ever use it?
Just cancelling those two non-necessities would put almost $1,500 back into our pockets over one year, money that could go into an RRSP.
There was exciting news
Vic discovered over $50,000 in a pension to which I had contributed during a previous job, which I didn’t know I had.
Hard to believe, perhaps, but true. (I’ve never claimed to be a financial genius.)
I wouldn’t ever guarantee that talking to an advisor could lead to a surprise like the one we received.
But seeing your overall financial situation and making a plan is definitely worth the time it takes to gather statements, create a budget and attend a few meetings.
My wife and I have a new perspective on our finances.
We’re looking forward to working with Vic.
And now I walk right past the lottery kiosks.
Sponsored by Shannon Hood Financial Services Inc.
