Financial planning: Catch up at any age

By David Aston on August 5, 2008
Estimated reading time: 2 minutes

If you feel left behind, take heart. A few simple moves can put your finances back on track.

Marianne and Thomas Robinson spent much of their 30s living the good life in Ottawa. Marianne made good money as a massage therapist; Thomas prospered as a graphic designer. Money was abundant and the Robinsons enjoyed nice vacations and frequent shopping expeditions. Then the couple (we’ve altered their names and some personal details) moved to Vancouver in search of a West Coast lifestyle and mild climate. They had bargained on a slow period as they established themselves in a new locale, but as the months shuffled onward, customers failed to appear and they grew nervous. The birth of their daughter Lydia filled them with joy, but also with frustration. How would they pay for the added expenses of a child? How could they find time to care for Lydia and simultaneously grow their businesses? With incomes languishing, the Robinsons resorted to living off their credit cards. Marianne, now 38, and Thomas, 43, soon owed $40,000. They felt angry and desperate. They wondered if they might need to declare bankruptcy. “It was a struggle,” recalls Marianne. “When you’re in that situation it seems like there’s no light at the end of the tunnel.” Sound familiar? Many of us feel just as left behind as the Robinsons. We figure that by our mid-30s we’ll be well on the road to financial success and by our mid-50s we’ll be rolling in money. But reality is not nearly so generous. The median net worth of a Canadian household headed by somebody under 35 is less than $30,000 — barely enough to buy a minivan. By the time you hit 55, you’re doing better than average if you’ve paid off your house and accumulated more than $65,000 in RRSP savings. It doesn’t require much of a setback to derail your progress toward even those modest achievements. At 40, the struggle to simultaneously establish a career, start a family and buy a home can defeat even well-intentioned, well-educated couples such as the Robinsons. At 50, a job loss or a marriage break-up can wipe out a couple of decades of savings. At 60, an underperforming stock portfolio or a simple lack of savings can make retirement look like a looming disaster. That leaves many of us asking, “How can I catch up?” To get an answer to that question, we’ve quizzed financial advisers and money experts across Canada. Our key finding? No matter what age you are, there are plenty of tactics you can use to help you achieve financial success and a happy retirement. “Where there’s commitment, there’s lots of hope,” says Nancy Zimmerman, a money coach in Vancouver, who helped Marianne and Thomas Robinson with their catch-up strategy. Read on to find out how you, too, can put your financial progress on fast forward.