Life events, whether expected or unexpected, affect people in different ways, and they react in different ways. You can have parallel circumstances with someone, but because you are both unique – whether it’s in your personalities, viewpoints, dreams for the future, and so on – your paths will ultimately diverge.

Angela and Colin

Picture two individuals, Angela and Colin, who are complete strangers to each other but have a lot in common. They’re the same age, married, and have two kids each. They earn the same income and each is the primary income earner. Angela and Colin will face the same life events, but their financial plans will evolve in different ways.

More income

While their kids were very young, Angela’s husband and Colin’s wife were stay-at-home parents. Now that the kids are in school, their spouses re-enter the workforce, and because of this, each couple has extra income.
Colin and his wife want to allocate the extra income to two goals: paying down the mortgage faster and bumping up their retirement savings so they can retire earlier.
Angela and her husband, on the other hand, have a different idea. For some time they’ve dreamed of purchasing a cottage to begin a new family tradition. They’ll now invest toward this goal through their Tax-Free Savings Accounts (TFSAs) and a joint non-registered account.

Job loss

A corporate reorganization hits both Angela and Colin, and both lose their jobs.
Once his severance runs out, Colin and his wife begin to feel anxious. Colin decides to speed up the job hunt and ultimately accepts a lower-paying position. To compensate, his wife switches from working part-time to full-time.
Angela, on the other hand, is determined to continue searching for her desired position. She meets with her advisor and they develop a plan to buy time, combining employment insurance benefits, household budgeting and drawing from her emergency fund. Her search is successful.

An inheritance

While in their early 50s, Angela and Colin each receive an inheritance. Angela uses this windfall to anchor her portfolio with conservative investments, which enable her to take on more risk in order to seek out potentially higher returns with the rest of her investments.
For Colin, however, the inheritance means he no longer needs to aim for a higher return to meet his financial objectives. He reduces his level of risk.

A parent’s health suffers

When Angela’s father suffers a stroke, she fulfills his wish to remain at home and arranges for 24-hour private nursing care, paid out of her own pocket. Also, Angela and her husband decide to purchase long-term care insurance for themselves.
When Colin’s mother has a stroke, he and his wife consider several options and the financial consequences of each. They decide that Colin’s wife will leave her job to help care for her mother-in-law. They plan to monitor the situation over time and adjust their plan as needed.

A customized financial plan

Your personality, beliefs, goals and choices shape your life journey – this includes the financial aspects. To prepare for more events that come your way, consider having a financial plan that is tailored to your needs.