Summer Financial Planning Tips

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Financial Planner Ines Iraoui returns to the podcast to discuss financial planning ideas you can do over the summer. Ines has been on the podcast previously, so check her previous appearances as they contain some great ideas around saving for retirement and education.

  • What are some of the ways a person can enhance their financial situation in the summer?
  • How can we evaluate our financial life, where do we start?
  • Now that we have a budget, what do we do next?
  • We now have an emergency fund – what about debt while planning for a vacation?
  • What would be the first thing to do when planning for a vacation?
  • What do we do when the vacation budget is lower this year?
  • Are there any financial tips you would give to someone before they leave on vacation?
  • When we are back from vacation, what can we do to evaluate and improve our financial situation?

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Chris Cooksey: Hello and welcome to the Advantaged Investor, a Raymond James Limited podcast. A podcast that provides perspective for Canadian investors who want to remain knowledgeable, informed, and focused on long-term success. We are recording this on July the 12th, 2023. I'm Chris Cooksey from the Raymond James Corporate Communications and Marketing Department, and today Financial Planner Ines Iraoui returns to the podcast to discuss financial planning ideas you can do over the summer. Ines has been on the podcast before and I encourage you to check out her previous appearances as they contain some great ideas around retirement savings and, uh, savings for education and that sort of thing, so check them out in the archives.

Welcome back to The Advantage Investor Ines. How are you doing today?

Ines Iraoui: Thank you Chris. I'm doing great. How are you?

Chris Cooksey: I am doing well, thank you. It's my first week back from vacation, so still getting back into the throw things, but, I look forward to some of these questions we talked about earlier because I certainly need some of this advice as we move forward through the summer.

Ines Iraoui: That's right.

Chris Cooksey: So summer is in full swing and people have some time off usually, and many are looking to set up their portfolios for the rest of the year or moving into next year, make sure that their goals are properly looked after and that sort of thing. So let's jump in and, and we'll start off with a wide question here at the start, but what are some of the ways a person can enhance their financial situation during the summer?

Ines Iraoui: You mentioned it actually. So the first thing a person can do is to evaluate their financial situation and evaluate what are your priorities and retirement goals? Where do you spend your money? How much do you save? Evaluate where you can make adjustments to ensure any summer travels do not set you back when it comes to those priorities and goals.

Chris Cooksey: Makes sense. Now maybe some ideas on how we can sort of evaluate our financial life. Where do we start, on this day where the Bank of Canada has raised interest rates again.

Ines Iraoui: Yeah, you can start by contacting your financial advisor to discuss the goals. So the goal is really the foundation. Let them know if they have changed. If your goals have changed based on any, for example, changes in your financial family situation and a timeline of these goals. When you have goals, you have to make a plan, and a plan starts with a budget. So take a few hours to track your expenses, trim the excess spending on unnecessary purchases of sub or subscriptions, and make a budget for what you would like the next year to be and stick to it.

Chris Cooksey: And budgeting too. That's one of those ones. - I've gone through the process, previously and you're always spending more money than you think you are. Is that just me or is that fairly common?

Ines: I think it's fairly common.

Chris Cooksey: Okay. I don't want to be an outlier. All right. So we have our budget, we've done it. We realize how much we're spending on coffee and lunch and all those things as well. What's the next step after the budget?

Ines: After the budget, you have to make sure you have an emergency fund. So an emergency fund can be a savings account, it can be a line of credit. The point is that the funds have to be easily accessible and without risk. Uh, it's rarely used, obviously only in case of emergency has a name that says it. So, for example, unexpected home or car repairs, loss of employment. An ideal amount for an emergency fund is between three to six months of expenses. And when you use it and when your finances are back on track, it's important to make sure the emergency fund is paid back if it was a line of credit or replenished if it was a savings account.

Chris Cooksey: Okay, now we have our emergency fund. We've done the budget, we're moving forward here. What about debt? I want to go on vacation. How does that all work together?

Ines: Yeah. Before spending on a trip or summer activities, it's very important to make sure your bills and essential expenses are covered. So do not pause debt payments for summer fun. Make sure you have funds to always pay for debt even while away, because that would not only affect your credit, but also be a setback to reach your financial goals.

Chris Cooksey: Okay. Now, what is the first thing you should do when you're planning for the vacation?

Ines: The first and the right thing to do is to make a vacation budget. So, if you're not planning to travel instead of a vacation budget, it can be a summer activities budget. You can fix an amount that you're okay spending this summer without it negatively affecting your goals. Your emergency fund. Your debt payments.

Chris Cooksey: Just say my budget's a little lower, than it maybe has been in previously years when it comes to the vacation. What is some advice there?

Ines: Yes, there are a few things you can do. Obviously plane and hotel tickets can be costly. You may want to travel during off peak times or use credit card points to pay for these tickets. You may also want to look at local events, local beaches, museums, festivals, hiking trails, and that is much cheaper.

Chris Cooksey: Okay. All right. So that makes sense. And now do you have any financial tips for us that, would give someone before they leave on the vacation?

Ines: Yes. Make sure your bill and debt payments are taken care of. Make sure your savings are automatic and wait at least one week before splurging on a big expense. You have to give yourself a cooling period before spending a big amount on an expensive travel activity or new bikes. Light renovations, investing in a pool. So taking some time to think about it can either confirm that your expense is wanted needed, or that it was simply a think of the moment.

Chris Cooksey: Right. And also, I guess, spacing them out too, right? Because as you mentioned, buying a pool, going on vacation, buying a new E-bike the same month maybe that's a little crazy. But if you spread it across, it might work out better. Okay. Absolutely. All right. Finally, as I mentioned, I'm just back from vacation, so I'm really interested in this question - What can we do to evaluate and improve our situation when we're back?

Ines: Yeah, so we go back to our first point and that is to take some time to review our goals, the timeline of these, and make sure you have a budget, an emergency fund, and that your debt payments are on track. So the process of budgeting is very important because it will allow you to trim any excess spending for the next month. And of course, we don't realize the value of this, but having a financial advisor who knows about your goals can help make you accountable in reaching them and prepare a plan with you.

Chris Cooksey: Right. So talk to your advisor. Understand, let them know what you're planning on doing. If you're going to go away for a few weeks to a foreign land, they can help you with that. And of course, you as a financial planner can help, create the buckets, that you need to live life, including the fun bucket, which, you know, life's not worth living if you don't have a fun bucket.

Ines: Absolutely. That's the whole point of it. Yeah. We save to be able to enjoy it. Right. So enjoy that those funds.

Chris Cooksey: Thank you for taking the time today, Ines, hope you'll join us again. It's always very informative when you join us.

Ines: Thank you very much for having me.

Chris Cooksey: Reach out to us at the Advantaged Investor Subscribe to the Advantaged Investor on Apple, Spotify, or wherever you get your podcast. Please contact your advisor with any questions you have. On behalf of Raymond James and the Advantage Investor, thank you for taking the time to listen today. Until next time, stay well.

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