Financial Planners are not all the same so what questions should you be asking?

August 25, 2011 by kathrynsjankowski

Five must ask questions for your financial planner are:

1. What qualifications do you have?  There are so many financial designations someone in the financial arena can have on their business card.  What is important is understanding how each advisers accreditation’s distinguishes their financial knowledge and which ones you should be seeking.   If its investment advice you are seeking you may want to scout out those holding the Certified Financial Analyst (CFA) designation.  These people are licensed to govern portfolios and they are well trained in the cash, stock and bond markets.  If you’re looking for someone to help you with financial strategies, such as Retirement Assessments, Estate Planning, Insurance Needs Analysis, RESP planning and the like then the minimum you want your planner to have is the Certified Financial Planning (CFP) designation.
2. What kind of experience do they have?  Some financial planning firms that are fee-based often have some of their more senior Consultants charge more per hour.  The thought is that they have the experience not to have to waste time (and, therefore your money) researching and investigating financial solutions for you.  Sometimes paying a larger fee can be less expensive.
3. What services does the financial planner offer?  Some planners specialize, like me, as a Financial Divorce Specialist, for example.  Others may specialize in elder care for seniors and they may hold designations focused on helping particular segments of the population.  Keep in mind, however, that most specialized planners have to have their minimum financial planning designation….kind of like a doctor who specializes in a particular field of medicine so you don’t have to deal with them just for their specialty…unless they have focused their business that way.
4. How are you compensated?  I’m surprised at how many clients feel they cannot ask this question.  By all means, you have a right to know.  Often bank personnel are paid a salary but they may also be rewarded for suggesting proprietary financial solutions.  Investment Advisers (IA’s) are, typically, paid by transaction with commissioned sales.  Fee-based solutions are often charged as a percentage of fees.
5. How are you regulated?  Each accreditation offers a governing body to those licensed to recommend securities.  For some financial folk who are not licensed to make recommendations they will still be regulated by some governing body. Some examples of these in Ontario and Canada are the Ontario Securities Commission, the Investment Industry Regulation Organization of Canada http://www.ida.ca/  and the Financial Planning Standards Council https://www.fpsc.ca/ and for those registered as Certified Financial Analysts you may want to look here http://www.cfainstitute.org/about/investor/adviser/Pages/index.aspx?s_cid=pwm_google_restructured_29_june_searchtext__certified%20financial%20analyst

Financial Divorce and Re-Marriage

Seems interesting that the subject about re-marriage has been top-of-mind this week.  Perhaps my recent article in Bank Rate and an interesting lunch with family law lawyer, Jeff Rechtshaffen, helped to pave the way.

Jeff and I spoke about remarriage and he re-directed me to an article on his web site.  I thought to share it with you as I think it definitely has a lot of salient advice.  His article is entitled, "When Should You Get a Pre-Nup?"

http://www.torontofamilylaw.com/article_When_to_Get_Pre-nup.php

http://www.bankrate.com/can/news/rrsp-rrif/Apr11_remarriage_tips_plan_1can.asp

FINANCIAL SMARTS: Not All Credit Cards Carry the Same Credit-Worthiness

FINANCIAL SMARTS: Not All Credit Cards Carry the Same Credit-Worthiness

Not All Credit Cards Carry the Same Credit-Worthiness

I was pretty excited to see that I accumulated $1,800 in travel dollars on my visa card only to find out I'd been had!  Well, maybe....

Sometimes we just accept status quo for awhile thinking we have the best financial products available or maybe we tend to give our local bank all of our business but is it always the best solution for us?  Often, we do have the best product available when we first got our cards but our world is dynamic, not static, so what was the best financial product out there simply isn't any longer.  With today's competitive world we have to re-think our financial picture, at least annually.

Credit cards are a hopeless mire of confusion...obviously meant to be, to confuse the consumer. I mean why have a two tiered system...." for every dollar you spend you get 3 travel points and you need 10,000 travel points to get a $50 credit towards your travel".  Why not say "you have to spend $3,333 to get $50 travel points"?  Because it seems like a lot to spend for such a little reward, right?  Not only that but some cards offer bigger rewards for groceries and fuel as opposed to purchases made with our "disposable' income...or credit...for that matter.

If you want to do a quick comparison of what is the best deal for you, if you are interested in travel cards, check out this website http://www.rewardscanada.ca/cccompare.html

If your focus is not on travel then this website compares all the cards http://www.redflagdeals.com/deals/main.php/articles/credit6/ and it takes out the ones you want to cull, based on the service provider and some of the more classic features that credit cards tend to reward it's holders with.

In the end it appears shopping "for" a credit card can be much more difficult than shopping "with" a credit card!

"I'll Be Back" ~ Arnold Schwarzenegger

well, maybe not according to Maria Schriver.  Four kids and 25 years later they are calling it quits.  Seems like more and more people are getting divorced later in their married careers.  Yes, "careers", after-all, marriage is a lot of work.  Most recent stats show that 37.7% of all marriages won't make their 30th anniversary. ....like Arnie and Maria.  More and more people over 40 are getting divorced. Because of this, typically, there are children involved so the family dynamic is changing.  It's not so weird to have step-sisters and half brothers and even more than a couple of parents.

Along with the changing family dynamic, one might experience different needs for couples and many of them are financially based.  Amongst the considerations is the kids from previous relationships, age differentials and staggering retirement considerations, current expenses and who's kid is going to be supported through their education and to what extent?  With a potential 'brady bunch' financial commitment, retirement plans may seem to be....well....non-plans.

So what's the message here?  Planning, planning, planning.  I think it's important that the whole family unit is on the same page.  It's also helpful if "Mom" and "Dad" tell the kids their plans...and why!  The conversation could go a little like, "Son, I can't pay for all of your education but I can contribute.  If I pay for all of it then I can't afford to retire until I'm 75 or I'll have to live in  your basement in my old age."  I think then, the kids 'get it' and the parents have set the boundaries and expectations. Withe the potential of a large family dynamic and many needs to consider.........the conversation should be key.

Is CRA being fair to the elderly?

If your spouse is a beneficiary of a pension plan did you know that you can allocate some of that income to you?

OK, so why would you want to do that?!  If you have a lower marginal tax rate then it may be beneficial to put the income on your tax return and pay the tax at a lower rate.  You can split up to half of the pension income and only with a spouse or common law partner.   The really neat thing is that you don't have to do it every year and you don't have to always use the same percentage to split.  You can vary these amounts annually....or not even split at all.

This may be a huge savings, especially if one partner has a pension and the other doesn't have much retirement income.  Leveling the playing ground does two things...it lowers the income level of the spouse that has most of the income and then it increases the income level of the spouse who has the lower income.  In effect this lowers the marginal tax rate of the higher income spouse and increases the marginal tax rate of the lower income spouse.

A practical application would be ~ Mary has over $150,000 in pension income and her husband has no income. Her combined marginal tax rate is 46.41% and her husbands is zero.  If she splits her pension income with her husband, effectively earning them $75,000 each which would put them both in the 35.39% tax bracket.  In scenario #1 the taxes owing would be $69,615 and in the second scenario the tax payable would be $53,085.  That's a difference of $16,530!!!

Of course, I over-simplified the answer and there is much more to consider when doing your taxes.  For example, there is an additional benefit of both spouses partaking in the pension tax credit, amongst other tax issues..........however............it can definitely be a benefit to look at the pension splitting option for those with pensions or for those with income streams from retirement plans once they are both 65 years of age.

Keep in mind that the analysis should be done as this does not always work to everyone's benefit.  It must be considered on an individual basis.

Budgeting? and Future Value of Money!!!

Contemplating those Spring renovations?  or maybe a big vacation?  Of course, we have to spend money during our lifetime but there maybe some things to consider in the process.

Landscaping around your new home may cost you in the thousands of dollars so it's important to think not only about the use you will get from the project over the years but what you are giving up to have it.  Let's say your landscaping is going to cost you $10,000 and you are planning on retiring in 15 years.  If you had invested that money at, let's say a conservative 5% annual return, you would have $20,789.28 (not including taxes or fess).  But wait! ~ let's also say your home is an investment so the $10,000 in upgraded landscaping is going to improve your property and if you are planning on selling it within a few years that might translate into some added value.  Maybe, at this point, you are shifting assets, hoping that the real estate market will provide better returns than your investment portfolio?  If, however, you are thinking of doing renovations to increase the value of your home for selling purposes you may want to research which upgrades provide the most bang for your buck!

Or, maybe, putting off the home upgrades and taking that European cruise that you've always dreamed of may be in order.  Spending that same $10,000 (in after-tax income) for something that has virtually no future financial return is a whole other consideration.

Being in the financial business for 27 years I can say that advocating saving for retirement is not a bad thing but your Golden Year's may not be so golden.  It's a fine balance of living life and saving for the future.  However, I always tell my clients to "make an informed decision" so whether it's the home upgrades or the ultimate trip be sure to weigh all the consequences.

House Inspections ~ Worth The Effort???

You love the house you just saw on your search for a new home.  Do you put a clause in the offer to purchase for a home inspection?  What you REALLY need to know when choosing a home inspector!!!

No, I'm not going to talk about the house inspectors credentials and everything else you have probably heard on TV.  I'm sure you know that already.  I'm going to give you a warning that you, most likely, haven't heard before.  But first, let's talk about the "Should I? or Shouldn't I?"

Your house is going to be one the single one investment that you will put most of your money into.  Even if you are a multi-millionaire your house will probably be representative of your wealth.  Those pictures of Tiger Woods home floating around the Internet come to mind.  What also comes to mind is the phrase, "A new broom sweeps well.".  When you see the house of your dreams you are not thinking about the potential mold behind the walls and water damage that has been covered up in a 'staging' effort.  That house is perfect, in your mind...but is it?

I remember the time I went to see a house that I was considering purchasing and the teenage child decided to take a shower at the time of the viewing.  I opened the closet under the bathroom and the amount of water seeping through the ceiling ensured that I wasn't coming back!

As you may have already ascertained...a home inspection is a must.  Paying a few hundred dollars can save you, potentially, thousands.  You may decide to buy the house anyways but armed with new information the seller may agree to a lesser price considering the price of the fix-ups.

OK, so here's something that no one tells you.  Do Not use the home inspector that the reals estate agent recommends.  I know you trust your real estate agent, otherwise you wouldn't be working with them to find your dream home.  Remember, that real estate agent gives many referrals to that home inspector.  The home inspector really wants to help the real estate agent sell the house or he/she may not get much more business from this steady referral base.  I'm not suggesting that home inspectors will lie on their reports but they may not delve much beyond the letter of the law when it comes to their disclosure.  House inspectors must cover a number of points to do a proper inspection but it doesn't cover Everything.  Personally, I think it's more likely that if the house inspector that you hire, that is working just for you, feels there may be issues beyond the scope of what is necessary for them to inspect they might be more willing to disclose this information than if they were referred by the professional that is trying to push through the sale.

The Debits and Credits of Divorce

The financial aspects of a divorce can play out differently for every divorcing couple.  At a time of high emotion you may want to protect yourself, financially by making some prudent choices.  Your bank ~ you want to make sure that they know about your situation.  Any money held in joint accounts likely only needs one signature to withdraw so you want to ensure you take your half out and place it in an account in your name only.  Ensure the bank also puts a hold on any credit cards that you jointly share.  Those country songs about seeking revenge and making the other spouse pay through reckless credit card spending came from somewhere.  You want to make sure that it doesn't happen to you.  Remember, you are still jointly responsible for that debt.  That means that even if your spouse is not paying the monthly payments on those credit cards...you should.  Any repayment can, hopefully, be settled through the separation agreement as part of the negotiation.  It's better to do it that way than end up alone with bad credit.  Another good exercise would be to close any credit cards you don't need. 


Remember those investment accounts, especially the registered ones?  Registered Retirement Savings Plans and Registered Pension Plans (as well as Tax-Free Savings Accounts) often ask for the account holder to determine a beneficiary.  If you chose your spouse you may want to contact the financial institution managing these accounts to change your beneficiary.  


Now that you have looked after the registered savings what about the regular savings investment s that you have?   Those assets and their distribution are covered in your Will so you will want to re-write that too. 


Your not finished yet....while you are re-writing your Will  you may want to consider re-writing your Powers of Attorney (PA).  Your PA covers both medical and financial matters should you become incapacitated. The last thing you want is your spouse to be calling the shots with the doctor as to your care, if you can't speak for yourself!!!  

Jewelery ~ From an Estate Planning Point of View

One of my clients is aging.  OK, we are all aging but she is aging to a point where she wants to be responsible for what happens after she leaves us.  Her name is Edith.  Edith has accumulated many things during her tenure, here, on Earth, and she has given much thought as to who she would like to see get which trinket or object of perceived value.  To her beneficiaries the value may be extrinsic as it will always produce a fond memory of Edith, herself, but does the object have any intrinsic value?  How can Edith divide her wares on an even basis to her beneficiaries from an Earthly value perspective?

This weekend I was in a business coaching session and I happened to be sitting next to a woman who would provide a perfect resolve for Edith's dilemma.  Barbara is her name and Barbara's specialty is to value vintage jewelery.  I thought of Edith right away.  What a perfect solution to have such an expert peer through Edith's jewelery collection and make note of any hidden gems?!

Personal Effects Memorandum's are often attached to Wills.  They are not legally binding but they do disclose a 'wish' on the part of the deceased to have certain items go to particular people.  With full knowledge of her hidden gems and their approximate value Edith could write her own Personal Effects Memorandum and also ensure she is being fair about the value of her gift far beyond the memory of Edith, herself.

If you are interested in getting in touch with Barbara about her specialty, please let me know I will put you in touch!

Happy Planning.

Divorce ~ Save some money and get some clarity.

Fred and Bette were both hurt.  Their feelings of betrayal, loss of trust and the sense that the person who was to be the partner in your life is not only no longer fulfilling that role but also they have become a third party.  Through their negotiations they felt suspicious of one another when dealing with the financial issues, child custody and child access issues that they needed to resolve.  With so much at stake visions of increased, indeterminable professional fees loomed.

Fred and  Bette were confused by the complexity of their financial situation.  Without the necessary complicated financial software Fred and Bette were struggling with issues such as lump sum versus spousal support payments, the difference between taxable and non-taxable assets.  Who want the house and who can afford to keep it?  Should retirement assets be swapped for real estate holdings ~ is it beneficial to be house rich and retirement poor?  What happens to Bette's stock options?

How could Fred and Bette have saved a bunch of money?  They could have had a financial professional, who specializes in divorcing clients, calculate their financial situation.  Not only would it have saved on some legal fees but it also would have given them a more concrete visual picture of their lives apart from one another.  Often divorcing people do not want to gouge their soon-to-be-ex but rather they want the best result for both themselves and their ex-partner.

Something to think about, eh?

A Legal Means to Avoid Paying the Tax Man.

Who wants to pay tax when you don't have to, right?

I know I certainly do not so as soon as the clock struck midnight on December 31 I sent a message to my administrators asking them to transfer $5,000 from my non-registered accounts to my Tax-Free Savings Account (TFSA).

I really do not like the name the government gave to this tax-free haven as it's title often misrepresents the benefits.  It's not a savings account, per se.  It can be an investment account so that you can put any stocks, bonds or mutual funds into your TFSA and any interest income, dividends and capital gains you receive are not subject to tax!  Calling it a 'savings account' has led clients to believe that you have to put the funds in a 'savings account' at the bank earning today's low rate of interest rather than use a more effective investment strategy and they tend to dismiss this strategy all together.  What a missed opportunity!!!

What's even better is that if you have come into a windfall in 2011 and have not been contributing over the past 3 years you can catch up and put in $15,000 all at once!  The rules are that you can contribute $5,000 per year from 2009.  Unlike a RRSP you will not receive a tax deduction for your contribution but when you take the money out it isn't taxable income either (which it would be if you took it out of an RRSP).  You can also replace the money you took out.  Let's look at this example.

Let's say in 2009 I put in the allowable $5,000 and then again in 2010 so now I have $10,000 in the TFSA (I'm not going to add any returns for the purpose of this example).  I decide I want to go on a vacation and take the money out so I take out the whole $10,000.  In 2011, I win the lottery and I can put in $15,000!  That would be the $5,000 amounts I am replacing for the 2009 and 2010 tax years as well as the new contribution for 2011.

Sometimes it is more important to use the TFSA for a savings vehicle rather than contributing to a RRSP!!!  It can also be used as a tool for income splitting.    If you want further information or clarification please feel free to comment or contact me @ kjankowski@tewealth.

How much is HR bound by governance?

Today's blog is more of a question, rather than financial advice.

Our corporations are bound by governance, meaning that they cannot offer a product, like a pension plan for example, without explaining it to their employees.  My questions is ~ how much should corporations get involved with their employees?  Where is the line?

If a staff member is going through a divorce and is not preforming well at work due to emotional stresses ~ should the company pay for counselling?  Again, in a divorce situation, should a corporation hire a financial specialist to help the employee with understanding how his/her soon to be split pension is going to affect the employees retirement?  Or, is the employee left to find this out for themselves potentially placing themselves outside of a retirement solution during their lifetime?

Negotiations for the Right Reasons in Divorce

Sometimes divorcing people seek to covenant certain assets for the wrong reasons, typically fueled by anger.  "She cheated on me so I want her favourite......"(fill in the blank) is common.  When looking at the financial aspects of divorce, however, emotions should be negated in favour of logic.  Easy to say and hard to do, I realize.  I know my example is stereo-typical but all too often this is the scenario.  Wife wants to keep the house.  Why?  One reason is the way that women perceive money.  Studies have shown that women equate money with security.  A house has bricks and mortar and it provides shelter, after all.  Another reason may be that she does not want the children to experience too much change, all at once.  Dad is no longer at home and changing schools and the pressure of creating new friendships may prevail.  Although this reasoning may have a lot of validity, is it reasonable.  Maybe the house means a lot to him and she is angry but can she afford to keep the house?  Will she deplete all her assets held outside of the home to try to keep the house, finding out a few years later that she is house rich and in debt?

Maybe more logical choices are available keeping in mind the reasons stated for wanting to keep the house.  Perhaps less costly housing alternatives are available in the same neighbourhood so that that kids can go to the same school and have the same friends.  Maybe the newer housing alternative may be a benefit from other points of view like, no memories of married life and less upkeep.  Perhaps less expensive housing alternatives can also give her the opportunity to save for retirement, as well.

 In my example, I talked about the wife wanting to keep the house but men have other challenges in their financial decisions, especially if they are paying child and/or spousal support.  A little less often but becoming more common place that in past years is the issue of the wife paying support to her husband, especially since women have been advancing in their business careers and the same types of issues need to be considered in this scenario.  

The power of the financial neutral in a divorce situation is to draw out these conclusions before the financial errors are set in motion.  Often clients do not want to pay an additional professional (other than their lawyer) to help with the divorcing process but my argument is, "How can you afford not to?"

Life should be stop and go!

When all systems are a 'go' you have to sometimes stop and look out the rear view mirror.  Often, I see clients who are so busy chasing future dollars but they don't stop to look after the wealth that they have already created.  Remember, life is dynamic not static, so once you have your financial plan in place it doesn't mean that task should be off your radar forever.  As we chug along we should stop, at intervals, to re-assess the validity of our previous financial commitments.   A few things to reflect are:

1)  Is my Will still up-to-date?  What about my Power's of Attorney, both financial and medical?
2)  Is my portfolio working for me?  If not, is it time to consider a different strategy....????
3)  Is my retirement planning in place?  Will my pension be enough?  If not how much do I have to supplement?
4)  What will happen if I die tomorrow?  Do I have enough insurance to ensure my family is not hit by financial hardship?  How much is enough?
5)  Do I want to help my kids with the cost of post-secondary education?  Are they thinking of going to school and staying home or are they planning to leave the family home to attend school?
6)  Do I have elder care issues?  What is going to happen to my aging parents/grandparents?

So how often is reflection required?  I advise my clients to reflect upon these issues on an annual basis.  Pick a birthday, end of the year, June 1st (half way through the year), anniversary or some other date that is going to trigger you to remember.  All too often these questions get ignored and then when we are faced with issues we are often ill-prepared.  After all, spending a few hours every year ensuring the wealth you have already created is  well looked after is worth putting aside the potential for a few hours worth of potential future value, isn't it?

The Secret of How to Negotiate the Waves of the Stock Market

Many people are already doing this, either directly or indirectly.  Maybe they're doing it but they don't know they're doing it.  The secret of how to take the nervousness out of investing is to make the conscious decision to allocate your investments in a strategic fashion. 

For example, I'm a Balanced investor.  What does that mean, for me?  That means that my asset allocation is 60% equities (or stocks) and 40% fixed income (or investments with a stated rate of return).  I stick to this asset allocation through good markets and through bad markets.  If my equities become 65% of my portfolio then I take 5% out and allocate it to the fixed income component, and vis versa.  This keeps me disciplined in my approach with my investment portfolio.  It also does something else ~ it keeps me disciplined in the 'sell high' and 'buy low' strategy that tends to bring about successful investing.

Currently earning an income, I may not be so worried about the fluctuations of the market as I will be when I am retired.  Without income replacement it is challenging to watch those dips in the market but my strategy of keeping 40% in fixed income will help me.  While equities are out of favour the less volatile fixed income component of my portfolio can become my major source of cash flow.  This way I can wait for the equity markets to return and I will not be forced to sell them while they are at their all time bottom price levels.

Having my portfolio balanced, from an asset allocation perspective, is the first step in negotiating the waves of the stock market.

Teaching Kids About Money ~ I'm not kidding!!!

It's interesting that I have been hearing a lot about how to teach kids about money.  I know that when I counsel couples about budgeting I usually begin with how they think about money and what it means to them.  Most of the psychological issues with money stem from our up-bringing.  Typically, one person in the couple is the 'perceived' spender.  I say 'percieved' because they may spend more than their partners but they can also be good savers and have a very disciplined saving and spending philosophy.

So, as parents or grandparents what can we do to ensure that we are instilling the "good" philosophies about spending money.  Keep in mind that money is just paper.  What we want to teach our children is the work ethic, the sense of constraint and the freedom of enjoyment in a healthy balance.  That's the real lessons to be learnt.

Typically, we can start our very young off with the piggy bank and teach them how to save and how the savings add up, if not spent.  I think it is important to let children spend their money, if they wish, so that lessons can be learnt about how things cost money and how we can make conscious decisions as to whether we want to budget for the bigger ticket items or whether some smaller ones are justifiable along the way.  Letting children make their own decisions is a good one...but some guidance along the way is also important.  "You sure you want to spend that money on a new toy instead of saving a little more for that teddy bear that you saw at the store with Grandma?"  Remember, kids have short memories, especially when something immediately gratifying can be right in front of them.  Allowing them to make their own choices will also give them a certain amount of independence and neither choice should be deemed a 'good' versus a 'bad' choice.  Children must learn on their own, within limits.

Generally, after the age of about 5, it would be a good idea to set up a spending and a savings plan.  This shows kids that they can still make the independent choice to spend but saving money is also important. Perhaps, some small chores can be incorporated, just enough to ensure that they understand that money must be earned.  Of course, light chores are recommended at this age.  You don't want an over-stressed child..but rather, something that is befitting their age and capabilities.

Once children are in their mid-teens you may want to add a little 'credit' to the situation.  Give them a leeway of about $50 to 'over spend' with the intention of paying it back within a reasonable time frame.  This will teach them that they can have that immediate gratification but the work must follow and payments must be made.  You can even have the payments in increments.  It is important, however, that you child gets 'paid' even though they owe you money because they may chose to only repay half instead of the whole 'pay-check' and this also helps them to manage their funds in a responsible way.  Perhaps minimum payments should be understood and a 'credit' document be written up for them so they know their limits and expectations. 

Once your children have entered their 20's they may well be ahead of their peers and they will make financially healthy decisions with their childhood experiences and your guidance, behind them.

T.E.Wealth | About Us | What Makes Us Different

T.E.Wealth | About Us | What Makes Us Different

Does September mean turning over a new leaf?

As autumn approaches and we all have a renewed spirit of digging in our heels and approaching daunting tasks that we put off during the summer months we may also be thinking of the financial drain, if we are paying, or helping to pay, our children's tuition fees.  These expenditures can really help with the 'digging in our heels' feeling when discretionary funds are so minimized that we have little else to respond to other than those daunting, inexpensive chores. 

If the kids have been home for the summer or if the step children have been visiting more often during their summer vacation then entertainment, dinners out as well as clothing needs for our youngsters have already tapped into our 'fun' funds during the hazy days of summer. 

What does it really cost to educate them?  Well, of course, each university or college is different.  Prices depend on whether your protege is going to attend school and stay at home or whether they will be going away for their education.  If they stay in the country it is much less expensive than the hefty international tuition...unless your child has had the fortune to be born in France and returns for their free post-secondary education needs. 

If they stay at home and go to school, in Canada, the average cost for tuition and books is in the $5,000 to $6,000 range.  Of course, this does not include their housing or food requirements.  If they go away to school then you are looking at an average of $20,000 which includes tuition, supplementing their food bill, books and rent.  If we dare to add it up then the stay-at-home kid's 4 year degree is about $24,000 and the go-away-kid is costing about $80,000.  Keep in mind that this is after-tax money!  If you are paying tax according to Ontario's highest marginal tax rate then you have to make about $117,000, before tax, to fit this bill.  ....   and that's for one child!!!

Some children want to go on to graduate studies.  If you are thinking to help out here, then consider that professional designations can be much more.  Have a look at the link to Osgoode Hall's projected budget.
http://www.osgoode.yorku.ca/financial_services/enough_sample_budget.html

My advice?  Start saving early for your children's RESP.  It may be a drain on the pocket book when they are smaller but you will appreciate it when the times comes.  If you happen to run out of RESP funds after they turn 21 years of age remember that they can apply for student loans as, once 21, parental income is no longer a factor in the application process.  This allows you 'free' use of government funds until the child graduates and must commence repayment after 6 months.........maybe you can even save a little to help out!

OSAP

Divorce? Remarriage?

Remarriage? Who wants to think about the legalities of anything past signing the new marriage certificate when you are getting married again?  For most, remarriage is a significant turning point of a renewed beginning with all the hopes and dreams that most of us lost during divorce or widowhood, hopefully, with the lessoned learnt from the first experience.

Who wants to think about legals issues and considerations of the impact on others when we want to be selfish and focus on our 'special day'?   Before walking down this isle or, if you prefer, standing on a beach or overlooking a volcano to say your wedding vows you may want to consider the complications that might arise which may cloud your bright, shinny future.  Ben Franklin said, "An ounce of prevention is worth a pound of cure".  In this case having your remarriage legal issues well in place before you promise the rest of your life to another may add to the relief allowing you to actually enjoy your 'special day' and save you a lot of money should the unthinkable come to fruition.

Here's the link to my story......it may save you a fortune and your family many headaches to ensure you have everything well plannned out beforehand and that your estate is actually handled in the way you had intended it to be handled.

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100712_093205_4840