Finance 9. Consider downsizing For many snowbirds, the ultimate way to gain control over their finances is to downsize: to sell the large family home and move into something smaller, more convenient, and a little easier to clean and maintain. Obviously, if you’ve seen your home increase in value over the years, capturing those gains could give your retirement portfolio an immediate boost. And there are other savings too: a smaller home typically costs less in property taxes, utilities costs, repair and upkeep, and also the “stuff” that fills it. Changing all of that can give you a good deal more control over your finances than you had before. That said, downsizing isn’t a decision to be taken lightly. A smaller living space necessitates some compromises, particularly when it comes to howmuch space you have for guests, or your favourite hobby, or that shop in the basement or garage. Perhaps most important, where you live isn’t just a financial asset − it’s an emotional one as well. If you’ve lived in your home for a long time, it’s important to understand that what you’re gaining in simplicity may be offset by what you’re leaving behind emotionally. 6. Invest in a financial plan One of the most common sources of that feeling of being out of control is not having a clear idea of what your financial goals are, how you’re going to achieve them or whether you’re making the right decisions along the way. If you don’t yet have a formal financial plan – or at least a rough outline of where you want to be financially in three, five, 10 years –make it a priority to write one. Sure, the process takes some work, but think of it as an investment; an expenditure (of time and effort) that will pay dividends by making it easier for you to take control of financial decisions and providing guidance for years to come. 7. Set up regular(ish) reviews of your portfolio When it comes to feeling in control of your money, knowledge is power. So, when it comes to your money, don’t stick your head in the sand and assume that everything is OK – make sure that it is by taking an in-depth look at your portfolio holdings at regular times through the year. This is not to say that you have to take any action. But taking a look at whether your assets have performed as expected will help you feel more confident that you’re on the right path to achieving your goals. How regular is “regular”? Well, that’s a personal choice. For most of us, weekly or even monthly reviews are probably too much, particularly if nothing has changed with your life circumstances. Twice a year is probably a better target to aim for. That way, you can still get a good idea of how things are doing, without running the risk of overreacting to short-term events. 8. Build an emergency fund Like insurance, an emergency fund is something which you hope you never need. But if you ever face an event in which you need moneyright now, your financial life will be exponentially simpler − and you’ll feel exponentially more in control – if you have a source of ready cash available. How large should your emergency fund be?That depends on your age, your tolerance for risk, your spending and lifestyle choices and other factors. But a quick rule of thumb is six months’ worth of living expenses. Keep it in a low-risk, low-hassle savings account or a guaranteed investment (a short-term GIC, for example). After that, all you need to do is leave it alone. 28 | www.snowbirds.org
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