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  • Geoff MacGillivray

Getting your financial house in order

Updated: May 7, 2021

“People to plan to fail rather they fail to plan”

Step 1: Protection Through InsuranceTo set the foundation of your financial home and future success, it is important to begin with the essential protection and build from there. Life InsuranceA person’s ability to earn income is one of their most important assets. Their income goes toward providing for their family and accumulating wealth. Life Insurance is essential in protecting a family in the event of an untimely death. As people progress through various life stages, the need for life insurance changes. It’s imperative to stay in contact with your financial advisor as you grow and your needs change, you’ll be able to assess your situation and identify a plan that will give you and your family the appropriate protection.

Step 2: Eliminating debtIt is important to eliminate debt while you are saving for your future at the same time. Many people are so bogged down by debt that they have a hard time saving. By eliminating debt it will help set you up to be able to invest more in the future. There are many ways to eliminate debt such as refinancing or debt stacking. Refinancing debt to a lower interest rate can save you hundreds in interest and help you repay debt faster. You can refinance mortgages, auto loans, personal loans and student loans. One way to do this is through a debt consolidation loan, which is a personal loan that may come with lower interest rates than your existing debts or remortgaging to utilize some of the equity in your home to pay off higher interest debts.If you’re paying more than the minimum payment, you can try debt stacking for debt reduction. This debt repayment method asks you to make the minimum payment on all your debts except for the smallest one, which you’ll pay as much as you can toward. By stacking payments toward your smallest debt, you’ll eliminate it quickly and move on to the next smallest debt while paying minimum payments on the rest.Let’s say you have a $5,000 credit card balance, a $1,000 auto loan and $10,000 in student loans. With the debt debt stacking method, you would focus on paying off the auto loan first, because it has the lowest total balance. Once that is paid off you use the money from the auto loan and put it towards the credit card balance and so on.

Step 3: Planning for the FutureOnce you’ve built a solid foundation and started to eliminate some debt, the next step to getting your financial house in order is to build savings for shorter term needs. This includes establishing an emergency fund for the unknowns in the future, such as a necessary vehicle or home repair. Setting aside a designated amount or percentage of your income each month in the event of an emergency will reassure you that if something major happens, you’ll be safe. Preparing for unforeseen expenses may seem like you’re expecting the worst, but isn’t it better for your family financially if you don’t have to take a big financial hit in an already stressful situation?Maybe you have three kids that they want to send to college someday, or want to ensure that they have enough money to retire comfortably. By saving money and planning for these aspirations, you will be much more likely to make them happen in the future. You can sit down with the your advisor and discuss goals and determine a path to reach those goals that fits with their budget and current situation.

Step 4: Growing Through Investment and Wealth ManagementOnce insurance needs are covered, debt is eliminated and an emergency fund is in place, you can begin focusing on longer term and larger financial goals. The first step in this process is to identify what those goals are and to determine the amount available to commit to them consistently. Having a comprehensive conversation with your advisor on a regular basis is critical in ensuring appropriate insurance coverages and investments. More and more people, regardless of age or stage in life, are developing financial plans to help them stay on track for future plans and goals and to simply help boost their confidence in financial management. By following the plan closely and reviewing it regularly, your chances of meeting your financial goals increase significantly. Another benefit of having a clear financial plan is that it can help you balance different financial priorities. For example, they’ll learn how saving for children’s college education might impact the ability to save for retirement. Using the information gathered, you and your clients can then decide how to prioritize goals, implement specific strategies and choose suitable products or services to move them along the path to reach their financial goals.


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