Keeping your financial future on track during life transitions


From graduating university and starting a career; getting married, having children and making a job move; to buying and selling a house, divorce or losing a loved one; our lives are a series of transitions – some expected and some unexpected. Typically, every challenge or changing circumstance brings with it both emotional and financial implications. Unfortunately, we often fail to recognize how big a role our emotions play into our financial decisions. In fact, clients who come to me in financial distress have almost always failed to recognize this connection.

Financial decisions should always be objective and based on achieving important life goals. Too often during times of change, people look at their situation with a short-term lens and make decisions too quickly without truly understanding the longer term implications.

So what is the best way to ensure you are on track financially when you embark on a major life transition? Here is are five steps you should take:

  1. Do some soul searching, either on your own or with the help of an advisor to gain clarity around your deepest goals, hopes, challenges and fears. By confronting these issues head-on, you will have a clear understanding of your short and long-term goals, the obstacles you may face to achieving them and the opportunities that lay ahead.
  2. Take stock of your current financial situation including your current assets, debts and liabilities. While it might be scary to face difficult financial issues head on, the sooner you address them, the better off you will be in the long-term.
  3. Prioritize your goals. What areas of your life are most important to you? Do you have a family to take care of? Do you have health concerns? Are you hoping to travel extensively? Separate your needs from your wants (or wishes). By aligning your needs, wants and long-term goals with your current situation you will begin to see a clear picture of your future and any gaps you must fill to get there.
  4. Build and implement a financial plan that addresses your needs but also has strategies in place to achieve your wants.
  5. Check in frequently. This can’t be a set-it and forget-it approach. As your life continues to evolve and your goals shift, it’s important to re-adjust your plan to account for these changes.

Mark Shimkovitz is a financial advisor with Raymond James Ltd. Information provided is not a solicitation and although obtained from sources considered reliable, is not guaranteed. The view and opinions contained in the article are those of Mark Shimkovitz, not Raymond James Ltd. Raymond James Ltd. member of Canadian Investor Protection Fund.