(NC)—The recession may be over but many Canadian families are still struggling to regain financial stability. The average Canadian household debt reached an all-time high of $96,100 in 2009, according to The Vanier Institute of the Family.
“The economic slowdown in 2008 and 2009 was a wake-up call for many families who realized they were unprepared for financial upheaval,” said Liz Lunney, senior vice president, Fiduciary Trust Company of Canada. “The good news is that a few simple steps can help families prepare themselves for the unexpected.”
Here are four tips to “disaster-proof” your family finances:
• Create a realistic family budget with your partner. Ensure you account for all family activities and include a reasonable amount for entertainment. Review your budget regularly to ensure you stay on track.
• Have a safety net. Prepare for the unexpected and contribute to a “rainy day” account that will cover your budget should you face an unplanned drop in income. Experts say a good target is six months income. Additional tips on financial planning for the future are available at www.fiduciarytrust.ca.
• Get your advisor involved in your family finances and meet with them regularly. A trusted professional can help you build the right financial plan.
• Plan for the future. Ensure that your financial plan addresses short- and long-term goals. Make your children’s education and your own retirement top priorities. Open an RRSP for you, and an RESP for each of your children.