Plan long term, act daily. My advise for Canadian families and single parents.

Most families and single parents face unique financial challenges and opportunities. From managing day-to-day expenses to planning for retirement, a strategic approach is required to ensure financial stability and growth. I hope to provide a basic guide for Canadian families and single parents on how to effectively manage their finances. ?I will break down this guide into important areas of personal wealth management and bring basic insight into each.? I hope it helps.

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?Create a Monthly Budget:

Start by gathering all financial statements, including bank statements, bills, and income details. Use a spreadsheet or a budgeting app to categorize expenses. Allocate funds for essentials first (housing, utilities, groceries) before considering discretionary spending (basically everything else).

?Regularly review your budget to adjust for changes in income or expenses. This ongoing process helps in identifying areas where you can cut back or need to allocate more funds.

Having emergency funds available is key, especially for single parents.? Begin by setting aside a small amount from each paycheck, gradually increasing as your budget allows. Consider setting up automatic transfers to your emergency fund to ensure consistency.? I would suggest a TFSA (allocated into something with low to no volatility) or a regular high interest saving account.

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Savings and Investment Strategies:

Typically we can break this section into, short term, medium and long term.? I wont get into the type of actual investments I would recommend per timeframe as every individual is different regarding investment risk tolerance.? Having said that, I believe a portfolio composed of stocks, etf’s, bonds, alternatives and private mandates can be extremely efficient for some investors (please speak to your investment advisor or contact me for a second opinion).

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High-Interest Savings Accounts (short term investments):

HISA’s are Ideal for short-term savings goals, such as building an emergency fund or saving for a vacation. Ensure the account is CDIC-insured to protect your funds up to applicable limits.

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Registered Retirement Savings Plan (Long term):

Enjoy tax free growth and a income tax credit. Contribute early in the year or monthly to benefit from compounding and dollar cost averaging. Consider using your tax refund to reinvest in your RRSP, TFSA or other financial goals.? Be mindful of your RRSP contribution limit to avoid over-contributing. This limit is 18% of your earned income from the previous year, up to a maximum amount set annually by the CRA.

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Tax-Free Savings Account (Short, medium, long):

Enjoy tax free growth and access to this account is tax free (unlike RRSP).? Consider your financial goals (short-term vs. long-term) when choosing investments for your TFSA.? Keep track of your TFSA contribution room to maximize its benefits without incurring penalties for over-contributing.

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Registered Education Savings Plans (RESPs):

Take advantage of the Canada Education Savings Grant (CESG), which provides a 20% match on the first $2,500 contributed annually to an RESP, up to a maximum of $7,200 per child.

RESPs can hold various investments. Choose those that match your risk tolerance and the time horizon until your child starts post-secondary education.

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Tax Planning:

Most non-incorporated individuals are very limited when it comes to tax planning strategies.? Other then RRSP’s already discussed, see below a few common tips. ?

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Claiming Expenses: ?Keep receipts for all child care expenses. You can claim up to $8,000 per child under 7 years of age and $5,000 per child aged 7 to 16.? Ensure that your child care provider is eligible under CRA guidelines, which include daycares, nannies, and certain camps and programs.

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Canada Child Benefit (CCB):? Apply for the CCB as soon as your child is born or begins to live with you. Your benefit is calculated based on your tax returns, so ensure they are filed annually to continue receiving it.? Understand how your income affects your CCB payments. Strategies to reduce taxable income, such as contributing to an RRSP, can increase your CCB.

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For single parents please speak to your accountant regarding the option of claiming a child as a dependant.

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Retirement Planning:

This is one of the more common or popular topics when dealing with individual planning.? Using an investment advisor is key to making sure retirement planning is efficient. ??

?Spread your investments across different asset classes (e.g., stocks, bonds, alternatives, real estate) to reduce risk. Consider your time horizon and risk tolerance when selecting investments.

Regularly review and adjust your investment portfolio to ensure it aligns with your changing financial goals and market conditions.

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Understand the eligibility criteria and benefits of CPP and OAS. Consider factors such as your retirement age and income sources when planning how these benefits fit into your retirement strategy.

Plan how CPP and OAS will complement your RRSP, TFSA, and other income sources in retirement. This holistic approach ensures a balanced and sustainable retirement income.

Having a comprehensive financial plan created would be ideal to help determine how financial goals can be best accomplished.

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Financial planning is an ongoing process that requires attention, discipline, and adaptability. Canadian families and single parents can achieve financial stability and growth by employing these detailed strategies and regularly reviewing their financial plans. Staying informed about changes in financial regulations, tax laws, and investment opportunities is crucial for maximizing the benefits of your financial planning efforts.