By Libby Wildman
I have been a solo financier a few times, as I have gone through divorce twice. Not the savviest of financial decisions, but life happens. I have many friends who are also solo financiers — some who are widowed and others choosing not to be in a relationship where finances are shared. This is a trend: The world is opening and in some estimates by family lawyers, divorce has increased 40 percent during COVID-19. Baby boomers are aging and so many goodbyes are happening with our parents, who are well into their eighties.
Disruption and personal choice are leading to unprecedented numbers of people living alone. Managing finances solo can be daunting and many women in particular feel woefully inadequate to tackle the cause. Leave it to Beaver, Happy Days, All in the Family: These are TV shows from the past that depicted and helped shape our view that men wear the pants. They taught us that it’s men who make the “important decisions” at home, and “by the way, ladies; don’t worry your pretty little heads about money.” In these shows and in the minds of many with wealth, women make the meals, wear nice dresses and ensure that the children are taken care of.
Some interesting Canadian stats: More than half of our population are women, 35 percent of us have a university education and 61 percent are in the workforce (down to 55 percent during COVID-19). The thing is, we still disproportionately shoulder the caregiving responsibilities. There are lots of excuses as to why women may not have the time, the interest or the confidence to speak up, ask questions and learn how to manage their finances. I am calling on all women now, solo or in a relationship, to get knowledge, get involved and have a tax plan for your financial freedom. The payoff is that you will feel relief, pride and empowerment when you know that you can create the life you want or become aware of where changes need to be made. Where do we start?
Create relationships at your bank so the staff gets to know you. We live in a digital world, yet the banks still operate on knowing you and recognizing your signature. Make a list of your income, any trust money, your savings and investments. Take the time to set up a line of credit, at least one credit card and have annual reviews. Yes, bankers get paid to sell us products, but you can control which ones you want. It’s this relationship that will allow you to gain access to important debt or help when you need it.
Find an adviser who you trust and feel comfortable with and who will help you learn. Let them know that you want to be engaged in your own financial plan, not just someone who gets a call when it’s time to discuss your registered retirement savings plan (RRSP). We have four main tax-sheltered vehicles in Canada: our homes, taxfree savings account (TSFA), RRSP and cash value life insurance. See what’s right for you.
Find an accountant or take an online course and do your own taxes
Learn about your marginal tax bracket, tax-planning strategies and if actions like contributing to an RRSP are right for you.
Understand your bias and childhood money stories
It’s an interesting path to dare to go down. Who controlled the wallet and bank accounts in your home growing up and why do you think it was this way? Was money scarce? Was money a way of showing love or controlling and rewarding behaviour? Was it a topic that was openly discussed or was it taboo and unmannerly to bring up? Did you feel that great wealth was ugly or wonderful but not realistic for you? Delving into these stories and memories will help you to uncover why you have the money habits that you do today.
The mind is so powerful. What we believe is what we manifest in our lives. When you invest the time to create a financial model and plan, you will visually see what is capable for your future. When you commit to spending less than you make, saving what you can and putting to work what you already have or been gifted, the confidence will show in other areas of your life. The visual of knowing what your capital can grow to, and having goals for that financial freedom, will create a natural incentive to do more.
At Davis Rea we are deeply experienced in joining you on this journey of discovery — uncovering your family background, personal financial bias and understanding the actions that got you where you are today. Humans always benefit greatly when committed to understanding their “why.” Saving with a purpose, ensuring your investments work smarter for you and the exploration of generous gifting back to humanity are vital. Our team of amazing people are motivated to make sure you succeed. Have this discussion with us alone or with your family. I guarantee it will bring you closer to living your best life and leave you feeling empowered.
Libby Wildman is Head of Wealth Advisory at the Toronto-based investment firm Davis Rea and the founder of Liminal Escapes creative curated retreats.