With all the shopping, decorating, cooking, cleaning, gift-wrapping and celebrating – and maybe even the odd hangover or two – the Christmas holidays were possibly not the ideal time to spark a serious conversation with your immediate family. Let’s be honest, many of us just want to get through the festive period unscathed. Now that it’s all over for another year though, it might be a bit easier to open up. Particularly if you’re nearing retirement and have children who are becoming more independent and perhaps even have families of their own, it’s more important than ever to sit down with your family and plan for 2022.
1. GOALS FOR 2022 AND HOW FINANCIALLY VIABLE THEY ARE
Families often don’t discuss their financial goals with each other for fear of confrontation, but this can lead to unrealistic expectations and resentment amongst family members.
Tackle this head on! You don’t need to launch straight into the financial side of things – just go around the table and ask each person what they are looking to accomplish in the year ahead. This can naturally lead on to a conversation about finances and everyone’s individual financial goals. Openly discussing these goals together gives the person setting them a greater level of accountability and the rest of the family an opportunity to support and encourage them.
2. REVIEW – OR SET – THE FAMILY BUDGET
There’s no need to tell your children anything you don’t want to with regard to your finances, but every member of your family who benefits from things that cost money – such as a gym membership, mobile phone plan, video streaming subscriptions, or shared vehicles should at least be aware of what these things cost. If your children are old enough to be working, they’re old enough to be contributing to these bills. Even if you are happy to be paying for now, they still need to understand that their salaries are going to have to include these things in the future.
What’s just as important though, is to make sure you’re not paying anything unnecessarily. It might be that the magazines you subscribe to on behalf of ‘everybody’ are not actually being read by anyone at all. Or you might have a family membership to an organisation that no one has actually visited. If you’re not benefitting from these things, then stop paying out for them.
3. OPENLY DISCUSS YOUR ESTATE PLAN
This is the tricky one and there’s never an ideal time to discuss what will happen when you’re gone, but it’s always going to be better to broach estate planning when you’re in good health and everyone is happy. Christmas can be the ideal time for this. Your family need to have a broad idea of how you want your estate to be settled should something unexpected happen and while it’s not a pleasant thought, nor is them not knowing what to do and worrying about it on top of their grief.
Make sure everyone knows who your executor is and where all your important documents and information are filed. It’s also wise to cover your wishes should you become incapacitated, and who should be called at your financial advisor’s office if you pass.
The start of a fresh year is also a great time to schedule an appointment to review your lifestyle financial plan. We look forward to hearing about the goals you and your family discussed during your post-Christmas conversations.
This article does not constitute financial advice and should not be construed as such.