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Important aspects to consider in organizing your financial picture.

A version of this article originally appeared on RBC Wealth Management Insights.

When you think about your finances, there are likely a number of factors that make up the overall picture. And, over time, these pieces may change as your life or circumstances evolve. Whether you’re a recent grad or early in your career, an individual with a busy family household, or a longtime professional or business owner, periodic financial check-ins can offer a range of benefits.

Here are 8 financial “to-dos” that can help put you on the right track to achieving your goals.

1. Review your financial situation

Doing a financial review is a simple way to get a clear overview of your broad financial picture and where you stand today. If this type of personalized review isn’t something you’ve pursued before with a qualified advisor, think of it as a shell for your planning — it captures your family tree, financial goals, net worth and cash flow needs, as well as estate, insurance, retirement and other important information.

Once gathered, these details may help guide discussions on what strategies or types of planning may make sense for you and can point you in the right direction down different avenues of planning. The information can also be updated regularly so you can see how you’re progressing from year to year or as your situation changes.

2. Develop a retirement projection and / or financial plan

For many people, looking ahead to retirement is a main financial focus. In fact, one of the most common questions is, “Will I have enough to retire comfortably?” Or among business owners, “How will I create retirement income, and will it be enough?”

Whether your retirement is closer on the horizon or it’s decades down the road, a retirement projection can provide a holistic view of your situation, showing possible financial steps you can take or adjustments you can make to your plans based on what you envision for retirement. It can also identify and report on your goals, and illustrate how adjusting certain assumptions may impact your retirement plans.

If you already have a financial plan, remember it's something you can shift and adjust as you experience changes in life, or your goals change.

No matter what age you are, at the root of financial planning is thinking about and identifying your short- and long-term goals. From there, it’s about mapping out concrete plans to track towards those goals. Using information from your financial review and retirement projection, you may want to consider doing a personalized financial plan. A financial plan addresses all aspects of your financial life, including cash and debt management, tax and investment planning, risk management, and retirement and estate planning, tying it all together in a comprehensive way.

Within a financial plan, you can see various projections that illustrate whether you’ll be able to meet your goals at the desired age and to account for possible fluctuations. Your plan will also identify strategies to help you reach those goals within defined time horizons.

3. Ensure your asset allocations are up to date

On a fairly regular basis, review the asset allocation of your investments (cash, fixed income and equities), as well as their currency and geographic split, to see if any changes may need to be made. Here are two key questions to consider with your qualified advisor:

  1. Is my asset allocation appropriate based on my risk tolerance and financial and retirement goals?
  2. Have my circumstances or goals changed?

In addition to your asset allocation, the tax efficiency of your investments and their place in your registered and non-registered accounts are also important factors to review. As the saying goes, “It’s not what you make. It’s what you keep.” So, part of the process is looking at what makes the most sense to maximize your after-tax returns.

4. Use credit effectively

Part of managing your finances overall is paying attention to and maximizing opportunities on both sides of your balance sheet. Depending on your circumstances, it may be a good time to review your debt obligations and see if you can benefit from the current low interest rate environment by refinancing your high-cost debt, including your student loans, your car loan or even your mortgage.

If you have different sources of debt, consider consolidating your debt, as this may allow you to access a lower interest rate. If you already have a competitive rate on your debt, is the interest on the debt tax-deductible? If not, speak with a qualified advisor to see if there’s a way you can restructure your loan and your assets to reduce your interest costs, or make the interest on the loan tax-deductible to save you taxes.

5. Review your account structures to ensure they’re effective and appropriate

Preparing a list of all your bank and investment accounts may be a helpful exercise as part of creating or updating your financial plan or compiling a family inventory. Further to that, it may offer an opportunity to look at how each account is owned and whether the ownership structure makes sense for you. For example, many people own non-registered assets jointly with their spouse because it’s convenient, but that ownership structure may not always be appropriate or in line with your estate objectives. Also, using joint accounts may be problematic in some situations, as the joint owner may be able to potentially deal with the assets without your knowledge, or the assets may be exposed to the joint owner’s creditors.

6. Make sure your Will, beneficiary designations and Powers of Attorney (POAs) are up to date.

As an adult, regardless of your age, it’s crucial to have a valid Will in place. And once you have one, it’s equally as important to keep it properly updated. A Will functions as the guiding legal document in the administration of your estate and as a way to ensure your property is distributed according to your wishes after your death.

If you were to pass away without a Will, you would lose the element of choice with your wishes and intentions, as your estate would be administered in accordance with the legislation where you lived at death. And if you do have a Will but it’s outdated, it may lead to unintended consequences if your choices or circumstances have changed from what had originally been documented.

In general, it’s a good idea to review your Will every three to five years or any time a significant life event takes place. Some of the key triggers for a review include:

  • A change in your marital status
  • The death of your spouse or a beneficiary
  • Any new additions to your family
  • Large changes in your financial position or you’ve acquired a new property
  • If the people you’ve chosen as executor, beneficiary or guardians for minor children, for example, are no longer accurate

Note: Consider if this option is available in your country of residence. If you’ve already named beneficiaries in the plans or policies, is the designation current and does it still reflect your wishes?

Alongside the importance of maintaining an up-to-date Will is having and doing the same with a Power of Attorney, for both your financial affairs and healthcare. Again, no matter your age, if something unexpected happened to you and created a situation of incapacity where you were unable to make decisions independently, these documents would be crucial to ensure you were protected and your wishes were carried out in managing your affairs.

7. Think about your hopes and intentions for charitable giving

If being charitable is something that’s important to you, give some thought to how, how much and when you give, as well as what types of gifts you make. Many people focus on giving closer to the end of the calendar year, often in line with the holiday season and the deadline for donations to receive a tax credit. For tax purposes, as an individual, you’re entitled to a donation tax credit if you make a donation to a qualified donee, such as a registered charity, and the donation tax credit can reduce your taxes.

Depending on your motivations or interest in charitable endeavours, there are a number of ways to give in a more structured manner — throughout the year, during your lifetime and beyond. As an alternative to an outright gift or direct cash donation, which is the most common form of giving, there are many options for giving, including donating publicly listed securities, making a charitable bequest in your Will, setting up a charitable remainder trust, or establishing a donor-advised fund or private foundation.

Through exploring different avenues for giving and best aligning them with your personal or family goals, structuring your giving may help expand your charitable impact over time for the causes and organizations you care about. It can also be carried out in a way that fits with other tax, financial or estate planning strategies to meet your overall objectives.

8. Take steps to simplify your financial life

Here are some quick tips that can help you save time and money in organizing your finances.

  • Consolidate your finances. Many people have several active accounts, which can result in more administration, duplication of fees or possibly different investment strategies. Working with a qualified advisor to consolidate your accounts can help bring everything together effectively and cost-efficiently.
  • Bank online for convenience and access to your accounts at your fingertips.
  • Pre-authorize your bill payments to save time and ensure bills are automatically paid when they’re due, which can maintain and strengthen your credit score.
  • Set up a pre-authorized contribution plan to help make your savings a priority. By making your contributions automatic, the money is out of sight and out of mind, which can help curb your lifestyle spending and boost your savings for the future.
  • Keep your financial documents and a list of relevant contacts in a designated, secure area. Gathering pertinent files (e.g., financial statements and reviews, tax slips, retirement projections, insurance policies, Will and POAs) and storing them in a safe location will help you stay organized, and it can provide peace of mind for you and your family members (only those who would ever need to locate them) that the information is compiled and accessible if needed.

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