When it Comes to Financial Security, Everyone Can Use a Helping HandJun 30, 2015
For many Winnipeg residents, talking about money and finances on a regular basis with their parents wasn’t necessarily a common occurrence in their households. Even today, discussing money is often considered taboo, with many perceiving it as rude and indelicate to discuss with others. When financial problems arise, like increasing debt, consumer proposals or being faced with filing for bankruptcy, many people don’t know how to open up to their loved ones, even though they may already be depending on them.
The reality is that few of us will actually manage our finances entirely on our own throughout our adult lives, and debt reduction is difficult even for financially secure Canadians. At some point, including others in the financial discussion will likely become necessary, but doing so without much practice can be uncomfortable. A Family Annual Meeting (FAM) can be an opportunity for family members to learn about each other’s financial situations.
Much like the Annual General Meeting (AGM) utilized by the business world, a FAM allows members to discuss the family’s fiscal plan, including household budget, spending habits, debt relief, savings and investment strategies and retirement goals. Every family member is invited and every family member contributes to the discussion. One of the biggest benefits of a FAM is that it opens the lines of communication among family members about sensitive financial issues. Here are some issues that aren’t always easy to discuss that you should include on the agenda of your Family Annual Meeting:
Financial difficulties of different generations
It’s not hard to find examples of cash-strapped Millennials; this is a generation dealing with low wages, lack of job opportunities, high cost of living, student debt and skyrocketing housing costs. In order to afford a home, many first home buyers must rely on their parents for financial assistance. Many Baby Boomers are waiting hopefully for an inheritance to contribute to that empty retirement fund or help float their current financial situation. In fact, more than one third of Canadians are awaiting an inheritance to fund their retirement, a dangerous financial plan if that inheritance assumption hasn’t been communicated to them directly from mom or dad. Seniors face their own set of time-sensitive financial issues because of declining health, independence or mobility.
A FAM encourages different generations to discuss their financial difficulties and work together towards solutions. For example, Boomer parents and their Millennial children should consider discussing the level of financial support parents can comfortably provide to their adult children without risking their own financial stability or retirement plans. Talk with the seniors in your family about their routine for paying bills, where their income comes from (company or government pension, veteran’s pension, etc.), what their premium and coverage is for life and health insurance, where their existing level of debt is and what assets they hold. Seniors in particular might see their grown children’s well-meaning advice about debt help and living arrangements as intrusive. It’s sometimes overwhelming to recognize one’s own limitations and allow others to help; but for many people the support is a real relief.
Financial challenges and debt relief
For folks who are overspending, have overextended credit or aren’t managing their retirement funds wisely, credit counselling, debt management, and consolidation options are available to help manage debt repayment and avoid more onerous options like consumer proposals or personal bankruptcy. Including a debt relief professional like a bankruptcy trustee in a FAM or scheduling a special FAM-follow up meeting to support the efforts throughout the year can really help keep families on track, minimize frustrations and answer questions. Offering help in a non-threatening manner and visiting a Trustee or other financial planner or counselor together can take some of the pressure off and help get family finances back on track. #FinLit #FamilyFinances