FINANCIAL PLANNING Is It Important?

Whenever we look at our lives, we find ourselves busy, working day and night, sacrificing a lot of things, including family, children, fun, sleep and most important our health. We never take a moment to ask ourselves certain very important questions.

Why we are working (Reason)

What we are going to get (Outcome)

If after all these efforts

• Still have short of funds when our children require University education ($20,000 to $35,000) funds required for 1 year of university education.

• Our Mortgage is unsecured, and any sudden death of earning family member can leave the whole family on road.

• In case of disability, how our month to month expense will be managed

• At our retirement age, are we really going to retire? Do we have enough Retirement funds at hand?

• The estate we have built will be inherited smoothly, without any hick ups.

These are the few scenarios that should be looked seriously and be reviewed at least once a year.

Some important aspects of financial planning are:

Life Insurance: Coverage for any unexpected, life changing incident like death, disability A comprehensive life insurance policy and disability policy can be a good solution.

For example: A mortgage of $350,000 plus yearly income replacement of $35,000 for next 10 years, Educational expense of $75,000, Car payment of $25,000 leads to approximately $750,000 of life insurance coverage an average Canadian needs today.

RESP’s: Education is free up to high school, but when our kids enter in colleges and universities there is an expense of $30,000 per year for at least 4 years. Funds of $120,000 per child.

Retirement: How much you want to save and spend when retired.

For example: If you retire at 65 years: for next 20 years @ $40,000 a year. Looking for a saving of $400,000 at the time of retirement.

Estate Planning: If one is doing excellent in terms terms of income and assets, is there any Estate planning is done?

Financial planning is one of the most important aspects of our life. Stats tell us that more than 80% of the people and families are living without any coverage or very little coverage.

Every one is paying car insurance, an average of $200 per month, because it is mandatory. Most of us do not give priority to life insurance and financial planning. If we allocate $5 to $10 a day, we can come up with standard financial solutions for the family.