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November 16 2023 National Bank

Achieving financial well-being for you and your family

Money has long been considered a taboo subject to discuss with friends and family, but why? For some, it’s intimidating, for others, it’s considered private. The truth is, having conversations about your finances with your partner, parents, or kids can result in less stress for everyone down the road.

To celebrate Financial Literacy Month, industry experts share their best advice to help you and your family become active participants in your financial well-being.

Take charge of your financial decisions

Managing our finances can feel overwhelming. We must consider savings, investments, debt management and more. When there’s a knowledge gap, it can seem easier to delegate this to someone we trust, whether that’s a partner or a parent.

But experts advise against that. According to Vanessa Stockbrugger, Senior Private Wealth Advisor with National Bank Private Banking 1859, “If you have a partner or are part of a family unit, you want to make sure we haven’t delegated this role to one individual. That puts us at risk and creates financial dependence.”

She adds this can create a lot of stress for the person who has been delegated this role.

While financial conversations can feel intimidating, Stockbrugger suggests a few ways we can make them more approachable and inclusive.

  1. Gaining knowledge relevant to your life stage, whether that is building savings or planning for retirement.
  2. Money can be a tool to help you make life decisions. Ask yourself, can I afford this? What impact will it have on my life?
  3. Make sure everyone feels invited to the table and feels their concerns have been heard.

Money is known to be the main source of stress. By becoming more engaged in your finances, you are setting yourself up for improved health and well-being, you will create a path to achieve long-term goals and will be better equipped to handle any unforeseen circumstances.

Understanding financial needs at every stage of life

When we think about our family finances, we often think about saving for education or retirement, but does your long-term plan consider aging parents? While not everyone will need financial support as they age, it’s important to be proactive and have these conversations early to understand where support may be required—before someone is sick or in financial distress.

“You want to start opening up the conversation in small steps to build trust over time,” says Tania D’lorio, Manager of Practice Management at National Bank Financial.

Even if financial support isn’t needed, it can create an opportunity for parents to share wishes with their heirs—something 56% of Canadians haven’t done.

So, how do you start the conversation? D’lorio shares her best practices for conducting an effective discussion:

  1. Involve the right people—those who will be affected by your choices.
  2. Choose a neutral, safe, and open environment where conversation can flow.
  3. Have an agenda and allow others to participate in creating it. Make sure to share it with the group ahead of time.
  4. Create ground rules, such as no interrupting or focusing on issues rather than people. You may consider bringing a facilitator into the discussion.

Maximize your money and reduce financial stress

While being future-focused is great, let’s also acknowledge that saving for long-term goals can be difficult in an uncertain economic climate and your priority should be managing your day-to-day expenses.

For many people, financial stress is at an all-time high. “Higher prices are probably here to stay, and when we talk about inflation decreasing, we mean the rate of prices increasing at a lesser pace—it’s not prices coming down,” says Stockbrugger.

That means we need to get comfortable in this climate and focus on where we can make changes. Stockbrugger shares a unique approach that you may not have considered applying to your finances before.

“This came to me while studying science with my two daughters—our expenses are like solids, liquids and gases,” she explains.

Solid expenses are things like your rent, mortgage, and property taxes. These are necessary expenses. Liquid expenses, however, are more variable. They have a place in our household, but we have some control over them. We can buy fresh, organic produce, but that comes at an additional expense.

“Gas expenses are completely discretionary,” she adds. “These can be released if needed.”

She cautions to keep in mind that these “gas expenses” are the fun things in life. It’s vital to be intentional with this category and make choices that matter to us. Things like vacations, hobbies, clothing and luxury items would fall under this category.

To learn more about how to better equip yourself and your family for the future, watch the full conversation with panelists Vanessa Stockbrugger, Tania D’lorio, Nathalie Rathle (Associated Vice-President, Investment National Bank) and moderated by Jessica Moorhouse, host of the More Money Podcast.