financial planning posts

By Dan Caplinger
The Motley Fool

In tough times, people of all ages are struggling to make the most of their money. All week long, we've been looking at the distinct challenges that people in various age groups face and how they can overcome them to achieve financial security.

After having given tips for retirees and near-retirees earlier in the week, today we're turning to the particular issues that most affect people in their 40s and early 50s. As you'll see, the balancing act that middle-agers have to manage requires a different set of financial skills than what you'll use later in your career.

Financial planner Iveta Koskina recently met with a pair of clients who were both Ontario teachers, making a combined annual income of more than $190,000 and yet they had $100,000 of RRSP room that they weren't using.

"When we talk RRSP, they are the ones who should really be doing their RRSPs, because of their tax bracket," Koskina says of the teachers, whose income would be taxed at well over 40 per cent without a contribution in a registered retirement savings plan. "Instead, he's making $100,000, she's making $90,000, but they have no money to invest and that's because of inappropriate investing and poor debt planning."
Koskina consults for Investors Group Financial Services, the largest financial planning company in Canada, with more than 1 million clients, and the first pioneer of mutual funds in the nation. The number one mistake she sees Canadians making is failing to put money into their RRSP accounts. A Royal Bank of Canada report last week showed Canadians are investing into RRSP accounts at such a low rate, the contribution amount will fall below 2 per cent of disposable income by 2017 - a level not seen since the 1970s.

So you've made your list of what you want to accomplish in the new year and you're sticking to it. That is until appointments and work deadlines and social commitments start to eat away at your time and your money. So review your list of New Year's resolutions, and be realistic. And think about the following mistakes to avoid so your money isn't eaten up by promises you've made to yourself that you really can't keep.

Click through the photo below to launch the gallery, or read the story that follows, to find out which resolutions could cost you in 2013.

(CLICK PHOTO TO LAUNCH GALLERY)

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Ahh the joy of retirement - benefitting from the spoils of many decades of hard work.

For most Canadians after almost 50 years in the workforce, taking time with family and friends is the Life of Riley well deserved.

But like any age group, retirees can still be financially vulnerable, and as one of the largest growing age groups in North America, there are still many possibilities of what can happen to affect the nest egg.

For those retirees who want to make sure they're still the kings and queens of their money, here's six tips to avoid any problems in the golden years.

Budgeting doesn't have to be a horrible experience.

So says Lynnette Khalfani-Cox, The Money Coach®, a personal finance expert, television and radio personality, and the author of numerous books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.

"Unfortunately, most people have a total misconception of what a budget is," says Khalfani-Cox, who once had $100,000 in credit card debt, before paying it all off in three years and turning her financial life around. "Millionaires know that a budget is really a spending plan of action. It's a way to help you manage cash flow and achieve your financial goals."


In addition to being a regular contributor to WalletPop, Khalfani-Cox has appeared on such national TV programs as The Oprah Winfrey Show and Dr. Phil.


"The reason most people can't stick to their budgets is because they blow their money month after month on LIFE," explains Khalfani-Cox, an acronym that she breaks down in the video below.

Lose 10 pounds? Sure. Stop swearing?

Okay... good luck with that. What New Year's resolution should young couples really be thinking about making and sticking to? How about getting their financial houses in order? In our rush to lead "grown up" lives complete with house, child and Xbox, many of us are forgetting some of the building blocks of a healthy financial life.

"A lot of couples will spend money on a flat-screen TV or dinners out but won't put together documents that protects what is most important -- children, savings, house," says Rona Birenbaum, a financial planner at Caring For Clients, who is used to speaking to couples about getting their finances in order.

Here is what Birenbaum suggests to prioritize when it comes to new year's financial resolutions for couples entering 2012 with many questions, worries and -- sometimes -- no clue.

Create a Cash Flow Plan for 2012

The New Year gives everyone the opportunity to decide what's important to them. Create a cash flow plan, starting with saving goals (such as education, retirement), as well as fixed costs (such as your utility bill and mortgage) and then add the variables.

According to Dr. Paul Nussbaum, a fitter brain might equate to a more robust bank account and even reaching retirement sooner. He states, "Brain health is about a proactive approach to developing a more efficient information processing system. Problem solving, judgment, creativity, and insight are products of a healthy brain and the ingredients to sound financial planning."

If you're looking for a financial planner and unsure who to turn to, you're not alone. One issue many of us have is that financial planners aren't regulated in most provinces.

"Anyone can call themselves a financial planner," says Tamara Smith, Vice President of Marketing & Consumer Affairs for the Financial Planning Standards Council (FPSC). "But not all of them have financial planning credentials. They may be licensed to sell products, but they're not licensed financial planners."

So, how do know if the planner you're thinking about working with is for real? You can start by finding out if they're a Certified Financial Planner (CFP). While being a CFP doesn't necessarily mean a financial planner is right for you, all CFPs have to complete 30 hours of continuing education every year. They also have to abide by a strict code of ethics and follow established financial planning practice standards set by the FPSC. And that's something.

Start Your Search
But certification isn't the only thing you'll want to ask about before you choose a financial planner. To help you get started on your search, the FPSC has created 10 Tips for Choosing a Financial Planner. The list includes tips such as doing your own research on financial planning strategies, thinking about your financial goals, asking for referrals, checking credentials, and interviewing multiple planners.

As a financial type, I shouldn't admit this, but March is my least favourite time of year. RRSP season is barely behind me, and now I have to think about taxes? Wonderful.

I know I'm not alone, so it's no surprise that Canadians are looking for plenty of financial information at this time of year. And according to new research by Investors Group, who surveyed more than 1,000 Canadians who save and invest, many of us are finding the information we need online through financial websites, blogs and social media.

"We conducted this survey because advisors keep hearing [from clients] that their information is coming from the Web," says Christine Van Cauwenberghe, Director, Tax and Estate Planning at Investors Group. "Lots of people send all sorts of information through blogs or on Twitter or LinkedIn."

Online Sources More Credible?
The survey shows 42 percent of us now use online sources and social media to find information to help us make financial decisions. And 38 percent believe online sources of financial information are more credible than family and friends (30 per cent) or traditional TV, radio and print media (29 per cent). However, 66 percent still rely on experts when making the final financial decision.