You may have to book more sessions after your initial visit, or one might suffice to help you get organized. Heath says, it’s ultimately up to you to determine if you need an ongoing relationship that’s valuable to you and justifies the ongoing fee. “Some clients like the peace of mind and discipline,” he says. “Many couples appreciate having an impartial third party to mediate their financial decisions. Plenty of singles benefit from having someone to talk to candidly about finances in lieu of a partner.”
The best way to prep for a financial planning session is to ask the planner what they require from you, and then have your documents ready to meet with them, Heath says. That way you can get the most out of your time together, and come out with a solid plan.
7. Invest in GICs or other investments
Arguably, the best financial gift you can give your future self is investments. Depending on where you put your money, you could grow it with compounded interest.
GICs, for example, are low-risk investments that are great for saving towards life goals like tuition or a wedding. Putting your money in a GIC is like making a loan to a financial institution. You deposit your money for a set amount of time like 30 days up to 10 years, depending on the term, and the institution gives you back your money plus the interest earned on your deposit at the end of the period. If you think there’s a chance you’ll need the money sooner, consider a cashable or redeemable GIC. The interest rate will be lower than with non-redeemable GICs, but you can cash out anytime.
One thing to note is the risk/return tradeoff with investments. Riskier investments like stocks can come with higher potential returns. Many young investors start out with exchange-traded funds (ETFs), which are a basket of assets like stocks. ETFs have built-in diversification, which helps reduce your portfolio risk. If you’ve never invested before and you’re not sure how to begin, consider speaking with a financial advisor and signing up for the MoneySense Invest newsletter. And keep reading. Find out if investing is right for you and how to get started:
8. Make a will and powers of attorney
An Angus Reid survey found that 80% of Canadians under 35 don’t have a will. If you’re just starting out in your career and haven’t accumulated many assets, you might wonder why you’d need a will.
If you were to pass away without a legal will, the government would divide up your estate—your bank accounts, possessions, investments and other assets—between your parents or next of kin. It might not be split up in the way you wish it to be, and if you have a common-law spouse, they would likely be left out. This could cause a lot of worry and distress for your loved ones in an already difficult time.
If you want to write a will and you don’t have a complicated tax situation, an online will platform like Willful or Canadian Legal Wills could work. However, if your situation is a bit more complicated, you may wish to speak with a financial advisor or lawyer who works with estate plans.
Margaret Montgomery
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