Spring cleaning – Time to review goals, check in on your investment plan and ensure your financial “house” is in order.

April 23, 2024 | Portfolio Advisor - Spring 2024


Spring cleaning – Time to review goals, check in on your investment plan and ensure your financial “house” is in order.

Spring is a time of renewal with green shoots, rising temperatures, and longer days bringing more light into our lives. This sense of renewal often leads us to clean our homes, and get rid of the old to make way for the new.

But spring is also a great time to engage in a financial “spring cleaning”, taking the time to review your plans and how you are progressing towards them. As part of that process, it’s also an ideal time to review your readiness to meet future challenges and unforeseen events, to help ensure your financial affairs are tidied up and ready for any eventuality.

Here are five things to consider when engaging in a financial spring cleaning this season:

  1. Consider your goals: Changing circumstances – from work, to income, to family, to health – can change your priorities and therefore your goals. Your goals underpin your financial and investment plans, and that can affect your savings levels, investment portfolios and even key milestones, such as major purchases or your retirement date.
  2. Calculate your net worth: Subtracting what you owe from what you own allows you to benchmark where you are as you build your wealth over time. Rising income may make you feel richer, but if you aren’t growing your net worth over time, you might have an issue with spending or debt servicing.
  3. Make or update your budget: Over time, new costs (e.g., subscriptions, memberships, service fees) can sap your cashflow, while longer-term commitments (e.g., charitable giving, savings and investments) may need a review around their relevance and size, either higher or lower. A review of where your money’s being spent may help you better allocate your dollars towards what really matters to you.
  4. Review your investment portfolios: It’s important to review your portfolio at least once a year. If your goals have changed, that may impact how your portfolio is structured (e.g., growth vs. balanced), or whether you need income from your investments to support your lifestyle, for instance if you are about to realize on the goal of retirement. A change in your net worth may help you understand better how your wealth is building and in what way, while reviewing your budget and determining your cashflow may allow you to increase or decrease how much you are investing to better achieve your goals.
  5. Review your key financial documents: Reviewing your key financial documents annually is important, to ensure they continue to reflect your priorities, goals, lifestyle, or financial circumstances. You should also review them when there’s a major life event (e.g., marriage, divorce, birth of a child, loss of a parent or spouse). These key documents include:

i. Your Will: Changes in your life may change how you wish your estate to be settled, who your executor is, who your beneficiaries are, how you wish your legacy to be managed, and what it is to be focused on.

ii. Power of Attorney (PoA): A PoA document bestows enormous power on someone, who will have sway over your financial affairs in the event of your absence or incapacitation. Consider carefully who that will be, and be specific with them about how you would want things managed if anything occurs that required your PoA’s activation.

iii. Healthcare directive: In addition to a PoA, a healthcare directive helps ensure that if you become incapacitated your wishes as to your health are articulated and known so they can be acted upon. This may include termination of life under certain circumstances, and where and how you would want to be cared for if you cannot care for yourself.
iv. Digital assets: While your PoA and your Will will cover more traditional assets and bequests, making sure you list your online and social media IDs and passwords for your PoA and executor is important in this day and age. Without those, they may not be able to manage or terminate your online presence and assets (e.g., rewards programs, photos, etc.) if you become incapacitated or you have passed.

Now’s the time to “spruce up” your financial affairs, which can help you build your wealth and reach your goals. Talk to us today about helping you complete your financial “spring cleaning”.  

This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ® / TM Trademark(s) of Royal Bank of Canada. Used under license.


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