Helping Your Clients with a Mid-Year Financial Review

Now that the rush of tax season is over, how did your clients do? Were they faced with a big tax bill or did they receive a refund? Perhaps they feel as if they’ve had a less than stellar fiscal year, but they shouldn’t feel discouraged. As you know, mid-year is a great time to review financial goals and to make necessary changes now to ensure a better outcome next year. 

Here is a sample of the topics you can discuss with your client:

Create a household budget and stick to it: Do they know what’s coming in and what’s going out? It might be time for your clients to consider a cash diet and implementing a simple budget. Remind them that they can track their income and expenses on paper, a spreadsheet or by using personal finance software. Which ever method they pick should be one that they can manage on a regular basis.

Seriously reduce debt: Do your clients carry a lot of debt in the way of lines of credit, credit cards or other kinds of loans? With the possibility of an interest rate increase, they should consider adding a budget line for debt reduction and committing to paying it off.

Help them become natural savers: Encourage your clients to set up a pre-authorized contribution plan to transfer money automatically to their registered retirement, savings, education and/or disability plans. Remind them that the advantage of these regular deposits is that their nest-eggs will grow faster thanks to compound interest. Plus, any residual tax refund in the following year can be used to top up these accounts or pay off debt.

Help them clean up their tax act: Did your client take advantage of every possible credit in the tax season just past, such as: Spousal RRSP, the GST credit, child tax and childcare/caregiver credits, marriage/common- law/equivalent-to-married credits, RESP, charitable giving, medical expenses, tuition and education credits, and home-office expenses. Also revisit their situation if they’ve been through a major life event very recently, like: marriage, divorce, career changes, severance, retirement, illness and/or disability. 

If you think you might need to refresh or upgrade your credentials required to help your clients with a mid-year financial review, Knowledge Bureau is here to help with these great courses:

• Debt and Cash Flow Management
• Tax Strategies for Financial Advisors

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