Financially covering your assets

Seeing as my only dependents are my cats and I have yet to meet my soul mate, the last thing I have time to think about is pumping up my financial portfolio.

Or… ah… putting one together for that matter.

After all, there’s plenty of time to think about investing in a retirement fund when I partner up with Mr. Right and we start our life together.

In the meantime, I can continue living cheque-to-cheque, spending beyond my means and putting off opening a proper savings account. And when I do finally shack up with the future father of my children, my finances will miraculously sort themselves out. That’s the lie I tell myself every time I borrow money for a vacation, dip into my overdraft or, say, buy an outrageously expensive leather coat from Topshop (I had to have it, damn it!). But there must be some validity to the whole marriage-before-mortgage mentality. First thing’s first, right?


Ask any financial expert and they’ll say the same thing: waiting for the perfect relationship to financially cover your ass is a fool’s game — maybe not in those exact words but you get the idea.

“No one is going to care more about your financial future than you,” warns Patricia Lovett-Reid, senior vice president with TD Waterhouse Canada Inc. and host of MoneyTalk on Business News Network. “I think this is sort of the calling card to women, especially, that you have got to take control. And it is about taking control.”

She points to the female of the spending species specifically because apparently I’m not the only modern woman who is holding onto this outdated paradigm.

“It’s not from lack of ability; it’s simply a default sometimes,” continues Lovett-Reid. “More often than not, women will tell me the problem is time.”

Ain’t that the truth, sister. So how do I make time and where do I begin? The first thing fiscally delinquent singles (both men and women) can do is deprogram their old mindsets about money. Lovett-Reid calls it “sweeping away the financial dust-balls out of your head.”

Myth #1: A little debt never hurt anyone

“You’re paying debt with after-tax dollars,” says Lovett-Reid. “And so for any woman out there who’s wanting to take control of her financial situation, the first thing she should do is get rid of debt.”

Myth #2: You need a million dollars to retire and that’s not going to happen, so what’s the point?

“That’s crap,” says Lovett-Reid bluntly. “And what I mean by that is you need to know how much you need in retirement. And that means truly understanding – and maybe in some cases confronting — your own brutal facts in terms of lifestyle.”

Myth #3: It’s too late

“I don’t buy that concept. I do buy the concept people just do nothing and they become paralyzed and then overwhelmed and they forget about it,” says Lovett-Reid, who recommends just doing one thing a month to change and improve your financial security.

“The quickest thing to kill someone’s financial plan is procrastination. Someone can read your article, but if they don’t do anything, then they just wasted their time.”

OK, so no more excuses. So what’s next? Well, after you get crackin’ on ridding yourself of debt, start saving.

“So you replace one bad habit with a good one, and the savings habit is about paying yourself first,” says Lovett-Reid. “When you take money off your paycheque and direct it towards some sort of savings vehicle or investment strategy — even before you pay the government your taxes — what you’re saying to yourself is your financial life matters and that in itself is very empowering.”

Then there are other things like RRSPs, which Lovett-Reid says is hugely important.

“They just are,” she stresses. “People will say, ‘Yeah, but they get taxed when they come out.’ I know that… but you’re going to defer paying taxes today. And any way you can defer paying taxes, you should. It means more money in your pocket.”

As for life insurance, it’s hard to see the value for most solo acts when their only dependents are of the furry four-legged variety. But, as Lovett-Reid points out, there are other reasons to get life insurance such as having a charity that you want to support long after you leave this Earth, or maybe you have a business with employees that depend on you? “I always say to people, ‘You have to assess your own needs on this one. If something were to happen to you today, who would that impact the most and to what extent? And how could you normalize their life as best you could, knowing that money could never replace you being in somebody’s life?'”

When it comes to purchasing real estate, buying alone is a pipe dream in most major Canadian cities (hello Vancouver). But as we all know, overinflated housing prices are finally starting to (ever so slightly) deflate.

And if you’re lucky enough to have rich parents, a profitable grow-op or fat car insurance settlement, you can come up with a down payment. But then again maybe you don’t mind being a renter. That may not be your greatest financial aspiration and that’s OK too. As long as you have a focused financial goal and solid savings plan that you stick to.

“You have to know that life will throw you a curve ball and you have to know that nothing’s set in stone,” says Lovett-Reid before adding, “All of us need to have a Plan B — whether we’re single or not.”

Article courtesy of Click by Lavalife.

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