Are you on the road to financial freedom or is it time to make a U-turn?
You may have had your annual physical exam and taken your car in for scheduled service this year, but what about your Annual Financial Review?
If you were on a long road trip, you'd stop occasionally and look at the map to see if you were headed in the right direction, wouldn't you? An Annual Financial Review serves the same purpose. It's an opportunity to review how you've done financially over the past twelve months and make sure you're still headed in the right direction.
A good time to do your Annual Financial Review is before the end of the year so you can take advantage of any tax-saving strategies, but if you can't fit it in plan on doing it as soon after the new year as possible.
The first step in your Annual Financial Review is evaluating your goals. Have you made progress on them this year? Have your goals changed during the year? If so, review them with you financial advisor to make sure your plan still aligns with your goals.
Have changes in your personal situation taken place in the last year or do you anticipate any major changes in the near future? A job change, divorce, adding a baby to your family, retiring, buying a house, getting married, or moving can alter your income and your lifestyle significantly. It is very important you share any changes with your financial advisor so your plan can be adjusted where necessary.
Next, evaluate your risk reduction strategies. Review your homeowner's or renter's insurance and auto insurance. Would your savings be depleted if you were to suffer from a heart attack, stroke or cancer? Is your family protected in the event you unexpectedly passed away? Don't forget to protect the greatest asset of all - your income earning ability - with long-term disability insurance. These are all areas that should be reviewed with your financial advisor on a regular basis, even if you have protection in place you need to make sure it is still adequate based on any changes in lifestyle.
How are you doing on controlling and paying down debt? Has your credit card debt decreased this year? If not, it's time to figure out where the leaks are taking place and try to plug them. It's difficult to get ahead and invest when too much of your income is going to interest payments on credit cards. Your financial advisor can review your debt, and help you decide if consolidation is an option and possibly spot areas where “bad debt” can be converted to “good debt”.
This is also a good time to plan for next year's taxes. What can you do to minimize them? Take advantage of unused RRSP contribution room. Convert debt where possible to make interest tax deductible. These are just a few of the many ways to reduce taxes. During your Annual Financial Review your financial advisor can help identify the strategies that are suitable for you.
To book your Annual Financial Review and help clearly understand your current situation, contact Langlois Financial Services Inc. to set up an appointment.