For over a decade, Desjardins Insurance1 surveys have shown that money is a key stressor for most Canadians. They know it’s a problem but they’re reluctant or unable to break their bad financial habits. Top financial planning experts have called this phenomenon the ostrich syndrome. The fact is financial ignorance is not bliss.
Why do you think people avoid financial planning?
Many Canadians believe that our social safety nets, namely the Canada Pension Plan and Old Age Security, will be able to support them during retirement. But these safety nets will become depleted as the number of retirees continues to increase over the next 20 years. We all hear this warning and we’re told that it’s our responsibility to save for retirement. The problem is that most people are unable to picture what retirement looks like. If you can’t picture it, how can you prepare for it? So, you just don’t and avoid it all together.
How do you overcome the fear?
First of all, take ownership for your past financial behaviours and your future financial goals. Be honest with yourself and know that anything is possible with a plan. Next, write down your short- and long-term personal and financial priorities. Your financial goals will support your personal goals, so the two should be aligned. One of the main reasons why we are so stressed out by money is because our personal and financial goals are un-balanced.
Once we have our plan, what’s next?
Now you have to have the talk. It’s important to make time for regular financial discussions with your partner and some key family members. It’s also a good idea to work with a financial advisor who can facilitate the conversation and provide professional and unbiased objectivity. They’ll also have access to other professionals who can step in with solutions, like tax and estate planning. Next, set up regular financial meetings — say once a month or once a quarter — to review your financial priorities and goals to ensure that you remain focussed.
What would you say to someone who is convinced that it’s too late to fix their financial situation?
Honestly, it’s never too late to make financial adjustments even if they appear out of control. You can dream big and make it happen. It just means that you have to get organized, ask for help and start making informed choices. You’ll find that the sooner you can get your finances in order, the sooner you’ll be able to achieve your dreams.
To learn more about financial goal setting, speak to your financial services advisor.
Adriano Beghin, CIM, FCSI
Life and Health Insurance Advisor
Investment Funds Advisor*
Desjardins Financial Security Independent Network
Desjardins Financial Security Inc.
1 Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company, a provider of life and health insurance and retirement savings products.
This article is for general information purposes only and should not be construed as insurance, investment or tax advice. The information contained herein is based on sources and materials believed to be reliable, but are not guaranteed.