Financial Facelift, Money Coaches Offer Their Best Tips

Posted on: July 21, 2021

Our Money Coaches are often asked to offer advice to readers of The Globe and Mail Financial Facelift column. It is a popular feature with readers as it offers a glimpse into someone else financial affairs while offering helpful recommendations that can be applied to others lives or at least lead them to seek their own professional counsel.

Here are Financial Facelift features from the past 12 months featuring our Money Coaches.

Please note: the links below lead to the articles posted on The Globe And Mail website and some may be available to subscribers only. We have gathered the articles in PDF format which are available on our Media page. If you are unable to access the article on the Globe and Mail, be sure to read them on our website here.

Looking for money advice yourself? Connect with one of our money coaches today.

Can Luke get out of debt and develop better money habits so he can buy a home with his partner?

Published on May 15, 2020

He earns a good living and at 36, Luke feels that he should be doing better financially than he is. Single with no dependents, he has a government job paying $108,500 a year and a defined benefit pension plan.

But he has $55,000 in debt on a line of credit.

He is looking for better habits and strategies for saving, he wants to buy a new home with his partner, and long-term retirement planning.

Although Luke would like to develop a quick debt-repayment strategy, Liisa and Christine advise a ‘spend less” strategy as the first step.

CLIENT SITUATION

The person: Luke, 36

The problem: How to get out of debt as soon as possible.

The plan: Set up a system, with a clear goal, a budget, automatic saving withdrawals and bank accounts for different spending categories.

The payoff: Free of consumer debt by the end of 2024.

Monthly net income: $6,375

Assets: RRSP $24,000; residence $315,000; estimated present value of DB pension plan $172,000.

Total: $511,000 Monthly outlays: Mortgage $1,745; home insurance $105; utilities $320; maintenance $100; transportation $495; groceries $435; clothing $100; lines of credit $800; gifts $70; vacation, travel $200; personal care $30; dining, drinks, entertainment $430; pet $100; sports, hobbies $35; subscriptions $30; bank fees $35; health care $95; cellphone $125; internet $80; TFSA $100; pension plan contribution $945. Total: $6,375.Actual spending could be higher.

Find the PDF version of the article on our Media page.

Should Louisa use her inheritance to pay down her mortgage or fulfill her wanderlust?

Published on June 12th 2020

When the travel ban lifts, Luisa wants to hit the road and travel the world.

Recently, she inherited $50,000 and is torn between paying down her mortgage and spending more on travel. She also wonders whether there are any changes she should be making financially.

Barbara Knoblach, financial planner and money coach at Money Coaches Canada, reviewed Louisa’s situation.

CLIENT SITUATION

The person: Louisa, 69

The problem: Should she use her inheritance to pay down her mortgage or increase her travel budget?

The plan: Increase the travel budget to do the traveling she wants for the next 10 years or so. Leave the mortgage, at least for the time being.

The payoff: No regrets about not having done the traveling she wanted to while she could.

Monthly net income: $3,764

Assets: Cash $7,500; TFSA $52,300; RRSP $106,346; LIF $31,752; RRIF $10,033; residence $450,000; estimated present value of DB pension $673,541. Total: $1.3-million

Monthly outlays: Mortgage $606; property tax $236; home insurance $155; utilities $464; maintenance, garden $100; transportation $373; groceries $500; clothing $40; charity $40; vacation, travel $300; other discretionary $100; personal care $40; dining out and entertainment $200; pets $97; sports, hobbies $100; drugstore $40; health, dental insurance $145; phones $80; TFSA $400. Total: $4,016

Liabilities: Mortgage $96,595

Find the PDF version of the article on our Media page.

‘Pandemic drop’ has made Lana unsure whether her sizable investments can really sustain her for life 

Published July 10th, 2020

Lana is only 49, retired and no work pension.  She has substantial investments – proceeds from the sale of her share in a successful business – and a mortgage-free house in a small Ontario city.

Lana is spending about $39,200 a year and wonders whether this is the best way to structure her personal income from a tax point of view. Also, she wants to know if her investments are “well-enough diversified to weather a continued retirement” with the same income.

Her goal is to not run out of money. Daniel Evans, a certified financial planner at Money Coaches Canada, offers Lana advice.

CLIENT SITUATION

The person: Lana, 49

The problem: Does she have enough to maintain her lifestyle to the age of 90?

The plan: Draw from the holding company until the assets are depleted, then draw as needed from RRSP and non-registered accounts until she begins collecting government benefits. Adjust her portfolio to lower risk.

The payoff: Financial security despite an unusually long retirement.

Monthly net income (2019): $6,600

Assets: Cash $33,000; non-registered ETF portfolio $405,000; holding company portfolio $370,300; TFSA $56,700; RRSP $322,300; residence $560,000. Total: $1.7-million Monthly outlays: Property tax $375; water, sewer $85; home insurance $35; utilities $305; maintenance, garden $135; transportation $285; groceries $425; clothing $80; gifts, charity $130; vacation, travel $415; dining, drinks, entertainment $620; personal care $35; club membership $5; health care $180; phones, TV, internet $160. Total: $3,270. Surplus goes to savings.

Liabilities: None

Find the PDF version of the article on our Media page.

Can William afford to work less without falling short of his retirement savings goal?

Published July 24th, 2020

How much does William need to save for the coming years in order to have the retirement lifestyle he wants at age 65?

William has a lofty goal of retiring with $2 million. He is now 37 years old with a professional practice earning him a comfortable income. He is considering selling his business and he would like to work less. Will he be able to meet his lifestyle and retirement goals?

Steve Bridge, an advice-only certified financial planner at Money Coaches Canada reviewed William’s situation.

CLIENT SITUATION

The person: William, 37

The problem: Can he afford to work less without falling short of his retirement savings goal?

The plan: Try looking at things differently by figuring out how much he will actually need to spend when he retires. Reduce his savings to $12,000 from $18,000 a year and cut back on travel and dining out.

The payoff: A more holistic way of looking at his financial affairs.

Monthly net income: $12,500

Assets: Cash $1,400; RRSP $154,000; TFSA $72,000; non-registered (stocks, mutual funds) $44,000; corporate $54,000; business valuation $300,000; residence $500,000; investment properties $800,000. Total: $1.93-million

Monthly outlays: Mortgage $1,470; property tax $345; home insurance $120; utilities $295; maintenance $100; transportation $375; groceries $200; child care $255; child support $1,075; clothing $110; charity $100; vacation, travel $1,000; dining, drinks, entertainment $1,200; personal care $10; club membership $25; sports, hobbies $50; subscriptions $100; health care $125; phones, TV, internet $290; RRSP $1,000; RESP $100; TFSA $500. Total: $8,845

Liabilities: Residence mortgage $316,440; investment property mortgages $430,035; line of credit $44,400. Total: $790,875

Find the PDF version of the article on our Media page.

How can debt-laden Pauline and Perry prioritize paying off family loans?

Published September 11, 2020

This 40-something couple chose to invest in real estate. They are struggling to prioritize loans from family and bank loans and organize financial goals.

Should they increase the size of the mortgage when it opens up to pay off the family loans?

Their objective is to retire at the age of 65 and spend $100,000 a year after tax.

Steve Bridge, an advice-only certified financial planner and money coach at Money Coaches Canada, looked at Pauline and Perry’s situation.

CLIENT SITUATION

The people: Perry, 42, Pauline, 41, and their two children

The problem: How to pay off their loans to family and get their consumer debt under control.

The plan: Draw up a budget and use the surplus to increase loan payments to family. When their rental mortgage comes up for renewal next year, pay family members off by rolling the loans into a higher mortgage loan.

The payoff: A simplified long-term debt repayment plan.

Monthly net employment income: $11,440

Assets: Bank accounts $1,050; her TFSA $1,100; her RRSP $9,815; estimated present value of her defined benefit pension $686,880; RESP $16,000; residence $704,000; rental property $685,000. Total: $2.1-million

Monthly outlays: Residence mortgage $2,645; home insurance $75; property taxes $350; utilities $320; water, sewage, garbage $75; home maintenance $285; garden $50; car lease $275; car insurance $265; fuel $175; car repair and maintenance $150; groceries and cleaning supplies $900; clothing $85; child care $40; credit cards, credit lines $485; loan payments to family $1,250; personal care $50; dining out, drinks, entertainment $525; pets $90; children’s activities $440; other discretionary $120; phones, TV, internet $325; gifts $100; travel $500; life insurance $270; health care $25; RRSP $25; RESP $50. Total: $9,945. Surplus: $1,495

Liabilities: Residence mortgage $494,410; rental mortgage $322,545; line of credit $43,500; credit cards $9,650; loans from family $103,015. Total: $973,120

Find the PDF version of the article on our Media page.

Can Katarina, 64, afford to quit work? If she keeps working, will it affect her OAS?

Published October 9, 2020

At age 64, Katarina is on her own again, semi-retired after a long career and doing some casual work in a high-demand field. She has two grown children, a house and a small amount of debt.

Katarina would like to fully retire in about a year and hopes to have a spending budget of $70,000 a year after tax.

Is she on track? Barbara Knoblach reviewed her situation.

CLIENT SITUATION

The person: Katarina, 64

The problem: Can she afford to quit work? If she keeps working, will it affect her OAS?

The plan: She can quit any time if she wants to. To mitigate OAS clawback at age 72, defer OAS to age 70. In the meantime, convert at least a part of her RRSP to a RRIF and begin withdrawing money to supplement her pensions. Review risk tolerance.

The payoff: A better understanding of the complexities of asset “de-accumulation,” which can have tax consequences.

Monthly net income: $4,885

Assets: TFSA $51,985; RRSP $564,255; non-registered $6,600; estimated present value of DB pensions $880,000; residence $380,000. Total: $1.9-million

Monthly outlays: Property tax $270; home insurance $105; heat, hydro $250; maintenance, garden $50; transportation $345; groceries $400; clothing $125; line of credit $500; vehicle loan $605; gifts $40; vacation, travel $100; dining, drinks, entertainment $350; personal care $50; club memberships $240; golf $400; subscriptions $65; health care $250; health, life insurance $230; phone, TV, internet $255; other discretionary $500; TFSA $100. Total: $5,230

Liabilities: Line of credit $11,170; car loan $11,670. Total: $22,840

Find the PDF version of the article on our Media page.

How can Stella, 57, build a balanced and diversified portfolio?

Published November 27th, 2020

Stella, 57, is a do-it-yourself investor.

Recently, Stella signed up for an investment course that focuses on goals-based financial planning using a balanced and diversified portfolio. Currently, her investment portfolio has heavily weighted in Canadian dividend stocks. She is looking for a better asset allocation.

Her goal is to maintain her current lifestyle and she asks how to determine whether she has sufficient money to last until she is at least 85, and when she should start collecting government benefits.

Daniel Evans, a certified financial planner and investment coach at Money Coaches Canada, reviewed her situation.

CLIENT SITUATION

The person: Stella, age 57

The problem: How to build a balanced and diversified portfolio. Figuring out how long her savings will last.

The plan: Set aside three to four years of cash needs in a high-interest savings account. Build a fixed-income component using some real return bonds. Gradually shift into U.S. and international securities across a broad range of sectors using ETFs or index funds to achieve the desired diversification. Use TFSA for growth stocks.

The payoff: A portfolio to last a lifetime with less risk than she is taking now.

Monthly dividend income: $3,600

Assets: TFSA $61,000; non-registered stock portfolio $860,000, share of residence $560,000. Total: $1.48-million

Monthly outlays (her share): Condo fees $450; home insurance $85; property tax $210; utilities $100; transportation $230; groceries $1,335; clothing $210; personal care $40; dining, entertainment $135; pets $25; health care $50; phones, TV, internet $200; gifts $20; vacation, travel $335. Total: $3,425

Liabilities: None

Find the PDF version of the article on our Media page.

Financial Facelift Susan traverses employment during a pandemic

Published April 16th 2021

In 2018, Susan decided to go on a hiatus. She left her demanding work to take a break and travel. Upon return, employment prospects dried up and left Susan with few prospects. Then the pandemic hit.

She has some savings and a fully paid-for house but no pension plan. Should she sell her home and move closer to family?  She wonders if she has enough to retire now and how she should draw on her investments.

Her after-tax spending goal is $45,000 a year.

Barbara Knoblach, a financial planner and money coach at Money Coaches Canada, offers advice on Susan’s situation.

CLIENT SITUATION

Monthly net income (from savings): $2,495.

Assets: Cash in bank $11,500; LIRA $418,400; RRSPs $531,200; residence $440,000. Total: $1.4-million.

Monthly outlays: Property tax $370; home insurance $100, utilities $295; maintenance, garden $235; transportation $235; groceries $425; clothing $30; gifts, charity $70; vacation, travel $50; other discretionary $20; dining, drinks, entertainment $210; personal care $50; pets $40; other personal $30; health, dental insurance $155; other health care $40; phones, TV, internet $140. Total: $2,495.

Liabilities: Credit cards $1,350.

Find the PDF version of the article on our Media page.



Category(s): Money Coaching

Leave a Reply

Your email address will not be published. Required fields are marked *