Financial Plan is the range of main areas developed in the life of a family, whether it is a family of newcomers or old-timers in Canada. Sooner or later this plan comes into the mind of any family. That is why I want to introduce to you basic trends of how to build a financial plan, so that you can decide on your priorities, what you do first and what second. When we move to a new country, we cannot say that we know everything here. We learn; we absorb new information. Not everything that we hear from our friends or in school is right; depending on circumstances, information can be wrong. This Internet site is created for you to be able to get the right information, analyze it, make a conclusion and start making your own financial plan. I can always answer your questions, talk individually with your family and help you to make contracts for your specific situation.

Controllable Priorities:

• Pension program
• Educational benefits for your children
• Purchase of real estate
• Emergency fund
• Savings for personal needs

Those are the priorities, which are created and controlled by the desires and resources of the family. Only the family decides: what, in what order and when needs to be done.

Retirement Savings is retirement program, which everyone makes in addition to the government pension. This program has very good conditions and people like to use it. This plan allows getting a tax break and the interest, which was accumulated in a year, is not taxed. Excellent conditions, but this retirement plan can be opened only a year after you started to work. Obviously, family and only family will control the installments and withdrawals of the money from the retirement account. See details in the "Canada’s Retirement System and RRSP" section (RRSP).

Education Savings is the educational program, which allows you to pay partially or completely your child's education in any part of the world. This is an accumulating program, which contains group and individual sections (ways of accumulating money). Peculiarity of this program is that every year the government adds 20% to your investment and this year does not impose tax on interest. Compound interest makes savings very profitable. You can see the difference between those two ways in the "RESP" section (RESP).

Sure enough that this program is a kind of controllable priorities, because only the family itself knows when it is going to invest another sum from its budget. I would like to caution you against starting this program too early (early being resent arrival to Canada). If you do not have stable income yet, do not hurry to start this program. If you lose your job and would like to cancel this program for some period of time, you will be disappointed to find out that you cannot return the money back in case you stop the contract, which you started not long ago. You will not only lose your money, but will also feel moral pain. You should first look around in the new country, get a stable job and then start Educational Program. Later you should do it. Twenty percent of government support is too good an interest to disregard it. Even if you start the Program later, you still will be able to get your 20% from the government for preceding years. Before you start Educational Program you should get life insurance for parents. Only the parents are responsible for the children and especially in the new country where they do not have other relatives. If something happens to the parents, the children will need money not for their education in 5-10 years, but for food and living now.

Home is buying real estate. It is a part of Controllable Priorities. And it is true, because only family itself can decide when and on the basis of what financial circumstances they should buy real estate (a house or a condominium). After you choose your real estate with the help of an agent, there arises a question of mortgage and mortgage insurance; both done in the same bank. Try to compare interest and mortgage conditions in other financial groups. I can help you compare. It is advantageous to insure mortgage outside the bank. You can get more information on it in the "Questions and Answers" section (mortgage insurance).

Emergency Cash is a fund used when it is unexpectedly needed (when "a rainy day" comes). The major part of a budget in Canada is used for mandatory payments, such as: apartment rent, car insurance, property tax, monthly bills, etc. That is why it is important that a sum, which equals 3 to 6 monthly salaries should be available at any moment. It will be a kind of protective mechanism for your family enabling you to cover necessary payments, which may arise as the result of job change, business problems or other unexpected situations.

Canada is a developed country with well-organized financial laws and life conditions. Debt Reduction Program implies the fact, that almost all residents of Canada have different kinds of debts. Credit cards (even if it is accurately paid every month), credit lines, loans, mortgages, payment deferment (if you buy goods for which you can pay a year later) - all these are debts. Much depends on how a family treats its debts. Some people make debts, others do their best to pay back what they owe immediately, and some people pay only interest, because they cannot afford to pay the whole sum. But only the family itself can decide how to treat their debts; that is why we consider it to be a controllable event.

Personal Savings is a program designed to save money during a short period of time. This program also completely depends on the family.

Growth Opportunities is the next step in family development, when the family has an opportunity to multiply their savings through investments or by purchasing things, the value of which grow in time (coins, antiques, real estate, gold things, etc.)

Market-Based Investments are investments based on the market of securities. It is the next step in the development of the family, when they can afford to invest their money to gain profit. It usually does not happen in the beginning of adaptation in Canada, even for those people who came with money. One may need money in a new country unexpectedly: to buy a business or real estate. Investments imply long-term result. The result, which was expected, will not be reached in a short period of time.

Art, Coins, Gold, Real Estate all these show that the family has reached the standard of living and is able to invest money in profitable things like antiquities, pieces of art, gold, real estate.

All the listed above events like buying a house; building pension and educational plans, etc. depend on the income. If there is no income, all plans are ruined. Special safety programs were designed to protect people in cases when they cannot earn their living. One cannot make money if he is sick or dead. That is why people buy Life Insurance, Disability Insurance (for cases of illness), Critical Illness Insurance (for cases when a serious disease is diagnosed). Non-controllable events also include making a Will and Power of Attorney.

Because humankind is still unable to control such occurrences like death and disease, life and health insurance compose foundation for the structure of financial plan. Without these protective mechanisms all hopes, plans and businesses can be easily destroyed.

Death is one of uncontrollable events, which destroys all plans and hopes of the family. People start this kind of insurance program having different reasons for that:

• protect family and children from bankruptcy
• cover the debts ( mortgage, personal debts ) and avoid making new debts
• provide for the needs of the family for a period of time (rent, food)
• To secure the family against taxes in case they receive legacy in the form of property like real estate, country house, and business.

Life insurance is key to understand and build financial plan. In reality it is fundamental for all other programs. See details in the "All about Insurance" section (Life Insurance).

These plans are very important in this country, especially for families, which have children under age and real estate. Power of Attorney provides opportunities for a trustee to fulfill legal actions in case the person is alive, but cannot make independent decisions. The Will gives instructions on how to divide the property according to the will of the deceased and also empowers the trustee for legal actions after the death of the person. See more detailed information in the "Questions and Answers" section (Will/Power of Attorney).

This is not the kind of Health Insurance, which people buy because they have no group cover at work. You can find information about individual benefits in in the "All about Insurance" section (Personal Health Insurance). Health Insurance plays important role in the structure of financial plan, providing financial cover for a person in case of serious health problems. You can find answers to your questions on how this new kind of insurance works and allows receive financial support in situations, when Life Insurance or Disability Insurance have no power in the "All about Insurance" section (Critical Illness Insurance).

Disability Insurance is done for time when a person may lose ability to work as the result of an accident or illness. This kind of program is a very important link in building a financial plan. There are many different kinds of programs in Canada, which provide government support for a person who lost ability to make living as the result of an accident or illness. All individual and government programs are paid in addition to each other. That is why it is important to find out whether you have such insurance and whether you are liable to have sick-list (employment insurance) paid by the government; all that should be done before buying individual insurance. You can see information on this in the "Questions and Answers" section (Benefits at Work). You must ask yourself a simple question: what is the maximum period of time you can afford to be out of work? 1 week? 1 month? A year? Or just a few days, but you need money for living, for food and other things? And what if you get an injury or fall ill? It is the same as stop working. You must know beforehand whether you are liable for government support, employer's support or support from your personal insurance contract in case you lose ability to work as the result of accident or illness. If the answer is "Yes", the next question should be: When, how long and who is going to pay? Information on Individual Insurance you may find in the "All about Insurance" section (Disability Insurance).

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