Take Charge of Your Future with Financial Literacy

Take Charge of Your Future with Financial Literacy

Whatever your goals, dreams and challenges, financial literacy is a critical factor influencing what you can achieve in life.

Why? Because financial literacy can help you make smart decisions today that will shape your life and the opportunities you enjoy for decades to come.

As November is Financial Literacy Month, this is a good opportunity to highlight the meaning of financial literacy and show how it can positively impact your life.

Empowering your financial life

Being financially literate doesn’t mean you have to become an expert in financial matters.

However, it does mean getting to know the basics so you can ask relevant questions and have meaningful conversations with financial professionals.

Ultimately, becoming familiar with financial topics is about empowerment and being an active participant in the shaping of your financial future.

Financial literacy 101

Learning some of the fundamentals of personal financial management can go a long way in demystifying this important topic.

The following are some of the building blocks of financial literacy:

  • Managing your debt. Personal debt in Canada is at a record high, which is particularly concerning for younger Canadians who are growing up to see cheap debt as a way of life.
    • Financial literacy means understanding the impact of debt on your finances – including your credit score – and how different strategies can help you pay it off more quickly and at a lower overall cost.
  • Growing your wealth. Working hard in a job or running a business is only one part of the equation – there are many other factors that will influence the growth of your wealth during your lifetime.
    • Financial literacy means understanding how your income is taxed, learning how best to balance spending and saving, and identifying opportunities for growing your wealth through wise investment choices.
  • Protecting yourself and your family. The past year has clearly shown that life can throw unexpected curveballs, highlighting the importance of proactively safeguarding your financial well-being.
    • Financial literacy means understanding the role of life insurance as a powerful investment tool, the importance of disability and critical illness insurance for protecting your financial well-being, and the value of locking in lower insurance premiums when you are younger and healthier.
  • Working toward goals. A career can be incredibly rewarding in itself, yet it can also be a means to achieving any number of life goals.
    • Financial literacy means understanding the steps you can take now and throughout your career to help you achieve major goals, such as buying a house, starting a family, retiring early or engaging in philanthropy.

Adopting a holistic approach

Adopting a holistic approach to your finances means ensuring that all decisions and strategies are thoughtfully aligned with your current situation and future goals.

A base level of financial literacy – together with support from a trusted advisor – will help you put in place a comprehensive financial plan that covers all the bases and can evolve throughout your lifetime.

In addition to giving you greater peace of mind regarding your financial security, it will also leave you free to focus more time and energy on your family, your career and other important areas of your life.

Securing your financial future

Whatever your worries today and hopes for the future, boosting your financial literacy will empower you to move forward with greater confidence.

If you’d like to discuss your financial situation with a trusted advisor who can provide thoughtful guidance, please contact Rubach Wealth to schedule a call.

To discuss how greater understanding of your finances can get you on the right track to a better financial future, contact us contact us at info@rubachwealth.com or at 647.349.7070.

Giving with confidence in the time of COVID-19

Giving with confidence in the time of COVID-19

Eliminating hunger and poverty. Curing diseases. Building a just society. These are just some of the big, audacious goals that charities are trying to tackle within Canada and around the world. These goals are lofty enough, then you throw in a global pandemic and this proposition becomes exponentially more difficult. Charities across the sector are reporting revenues down markedly, with significant layoffs in progress – and more on the horizon. The size and scope of these shifts is beyond anything that we have seen before, far exceeding what we saw in the 2008/2009 financial downturn and with such broad effects even the most diversified revenue bases are seriously affected.

But much like gazing up from the base of a mountain and imagining the climb to its peak, achieving these goals can seem like impossible tasks. And indeed, they can be if we focus only on our own capabilities or push ahead without a strategy for giving.

Across the country, charities are modifying existing programs, developing new ones, and implementing measures to help prevent the spread of the virus – all in dramatically changed working environments.

However, when communities work together with a clear, well-informed plan, we can not only scale mountains, we can push them aside and achieve a positive impact that shapes the world for the better.

Driving change with intentional giving

As an individual, you may wonder how giving $100 or $200 to a charity can possibly make a difference. But imagine what we can achieve across Canada by working together as a team.

If all of us who can donate a few hundred dollars per year on average – perhaps 1% of our annual income – that’s billions of dollars to put toward solving important social challenges and achieving real impact.

What’s needed to make this happen? Intentionality.

Canadians are happy to donate here and there when someone comes knocking on behalf of a charity, but often not much thought or planning goes into our giving. As a result, our dollars can end up having less impact than we’d hope, or we end up giving less than we can.

Fortunately, we can overcome this by adopting a more intentional approach to giving and working together as Canadians to more effectively drive change.

Overcoming barriers to giving

Of course, the reality is that Canadians already contribute generously to charitable causes. However, together we have the potential to do even more to build up our social infrastructure and achieve those big, audacious goals. Two things that can help us boost our collective impact are clarity and confidence.

  • In the Thirty Years of Giving in Canada report, 69% of donors said they did not give more because they could not afford to do so. It is undoubtedly true that many Canadians already give as much as they can. But there are also many for whom uncertainty about their finances is the true barrier.

If you feel uncertain about your ability to give more, a trusted advisor can help you gain a clearer picture by assessing your current financial situation and helping you map out a financial roadmap. With more clarity on what you can afford to give, you’ll be in a better position to achieve significant impact.

  • The Thirty Years of Giving in Canada report found that 29% of donors cite concerns about inefficient or ineffective use of money as a barrier preventing them from giving more. A degree of skepticism is certainly warranted: sadly, the occasional news of a charity scam, or an event such as the WE charity scandal, can cast an unfair shadow over the entire sector dedicated to the society’s well-being.

Rather than limiting your giving due to pessimism, however, you can also seek out options for giving with greater confidence. For example, accreditation initiatives such as Imagine Canada’s Standards Program can highlight organizations that are committed to high standards of governance and accountability. When you are more confident that your money will be put to good use, you’re more likely to give more.

Joining forces to shape the world

Companies and individuals give to causes that are worthy. Philanthropy has grown each year, the new year more than the one before. But in difficult times, people dig deeper and give more to the organizations they care most about.

Achieving transformative social change requires us to dream big and join forces. None of us can eliminate hunger and poverty, cure diseases, and build a just society on our own. But working together with a clear, intentional plan, we can move mountains and create a better Canada for the benefit of everyone.

Elke Rubach is President of Rubach Wealth, a Toronto-based firm that helps established professionals and business owners support the people and causes they care about through comprehensive wealth and retirement planning. Contact Elke at 647.349.7070 or by email at elke@rubachwealth.com.

Bruce MacDonald is President & CEO of Imagine Canada, a national non-profit organization that creates programs and resources to strengthen charities, promote corporate giving, and support the charitable sector. Contact Bruce at bmacdonald@imaginecanada.ca

 

 

6 Steps to Boost Your Financial Fitness

6 Steps to Boost Your Financial Fitness

With the sun shining and temperatures rising, there’s a lot of incentive to head outdoors, be active and boost your fitness. As we gradually emerge from the challenges of the past several months, this is also a great time to get financially fit.

The pandemic has provided an important reminder of the need to prepare for the unexpected.

This list of 6 steps to boost your financial fitness can help you strengthen your position for whatever lies ahead – whether that’s more storm clouds or glorious summer sunshine.

Making financial fitness a priority

Just like physical fitness, financial fitness doesn’t happen by accident. You need to be proactive and make it a priority.

These steps can get you started:

  1. Trim your expenditures – The lockdown period has forced us to change our spending patterns. Without our normal routines, it has become easier to identify expenditures that now seem excessive or frivolous, whether that’s expensive weekday lunches or rarely used gym memberships. If you’ve been spending less in recent months, look for ways to make some of these reductions permanent.

 

  1. Leverage your registered accounts – Many Canadians have lost their jobs or seen their incomes squeezed in the past several months, providing an important reminder that we should get the most out of every dollar we earn. Registered accounts such as RRSPs, TFSAs and RESPs are powerful tools for tax-efficient saving and investment. Take this time to ensure you’re putting these accounts to optimal use.

 

  1. Reassess your life insurance – The pandemic has made it abundantly clear that life is both precious and unpredictable. Now is a good time to take a fresh look at your life insurance and ensure it will meet your family’s financial needs upon your death. Also ensure you are taking full advantage of your life insurance as a tool for growing assets on a tax-advantaged basis.

 

  1. Protect against uncertainty – Protecting yourself and your loved ones is always a top priority, and critical illness insurance and disability insurance have important roles to play in this. Ensure you have sufficient coverage to replace your income and cover your expenses in the event of an accident or major illness. Keep in mind that group benefits through your employer may be insufficient.

 

  1. Update your will – You never know when your time will come, so it’s important to have your affairs in order. Keeping your will up to date will ensure that your wishes are met and your wealth is distributed according to your preferences. Updating your will is especially important after any major life events, such as a marriage, divorce or death in the family.

 

  1. Prioritize philanthropy – The pandemic has cast a spotlight on examples of inequality and suffering in our country and around the world. The good news is that you can make a difference through philanthropy. Maximize your impact with a strategic approach to philanthropy aimed at driving meaningful, long-term improvement in the lives of others.

Growing stronger with a plan

Tackling your finances on a piecemeal basis can lead to small improvements but getting financially fit is much easier when you have a cohesive plan.

At Rubach Wealth, we guide our clients through these 6 steps and address other relevant areas as part of a strategic financial plan tailored to their needs and situation. To discuss your financial goals, contact us at info@rubachwealth.com

It starts with a conversation.

 

Guiding Millennials to a Brighter Financial Future

Guiding Millennials to a Brighter Financial Future

Before the pandemic struck, Millennials were already facing financial challenges with steady work sometimes hard to come by and housing prices often out of reach. The current situation is adding to the complexity that those currently in their early 20s to late 30s are being forced to navigate.

Fortunately, there’s plenty that Millennials can do to shift their finances in a positive direction – even in the midst of the ongoing crisis – and position themselves to thrive financially in the long term.

For a start, it helps to go back to basics.

Meet Alex

At 28, Alex is a few years into his career as a UX designer. He lives and works in downtown Toronto, where he usually makes the most of the city’s lively restaurant scene and nightlife (or he did, pre-COVID). Living close to the action for a minimal commute and maximum time with friends is important for Alex, so he’s saving up to buy his first condo in the city.

Alex is fortunate to have a job when so many across the country are currently out of work. His biggest challenge is that he’s fairly erratic in how he manages his finances. While he has a savings account where he sets aside money when he can toward a condo down payment, he doesn’t have any investments to speak of and racks up large credit card bills each month.

He’s clear on the lifestyle he envisions for himself in the years ahead, but not on how to achieve it.

A clear, simple plan

Alex is in a pretty good position, but he could be doing a fair bit better with a few strategic changes to his financial habits. And while we may be on the downslope of the current pandemic, applying long-term thinking to his money can put Alex in a better position to ride out future bumps in the road.

If Alex’s situation sounds familiar, here are three things you can consider to get on a better financial trajectory.

  1. Keep it simple. Financial planning doesn’t have to be complicated. It can be as straightforward as figuring out how to set aside a bit of money each month to pay off debt and make small contributions to an investment account. With a simpler plan, you’re more likely to stay on track since you’ll understand what you’re doing and why you’re doing it.

 

  1. Gain clarity. It may feel like everyone but you has their finances in order, but the reality is that many people have financial blind spots. If you’re feeling uncertain, one the of the best things you can do is ask questions and seek out advice.

 

  1. Start early. You already know that the sooner you start saving and investing, the better. What you may not realize is that even small amounts can make a huge difference over time, and that it’s never too late to start.

Putting in place a clear, simple plan can be beneficial for anyone who’s struggling with financial uncertainty. If you’re stressed out by the current situation and worried about the future, this is likely a good place to start.

Get on track

This pandemic will pass, yet new challenges are almost certain to arise in the years and decades ahead. For Millennials, living your desired lifestyle requires a proactive approach to ensure your finances can weather any future storm. This means going back to basics with a clear, simple and effective plan tailored to your unique needs.

If you’d like to discuss your financial goals and gain clarity on how to achieve them, Rubach Wealth can help. Contact us today at ww.rubachwealth.com

Together, we got this.

This blog post is part of Rubach Wealth’s Back to Basics series highlighting how focusing on financial planning fundamentals can help you stay on course toward your long-term goals during these uncertain times.