Juggling financial goals and making them work

We invited our readers to take an active role by writing to us and explaining in a few sentences why they needed a personalized money makeover with a MoneySense Approved Financial Advisor. We got close to 400 letters and, in the end, chose two couples and a single person with financial concerns that anyone can relate to. Click here to learn more.

Sammu and Mandy’s financial dilemma

When we first met Sammu and Mandy Dhaliwall, the Brampton, Ont. couple was in the middle of finding out just how financially disruptive a growing family can be to a sound financial plan. They’re dealing with the challenges of raising three kids under the age of five while finding a way to pay off their mortgage and save for the future.

In 2013, realizing their suburban Toronto home needed extensive basement renovations to create more play room for the kids, they ran up a hefty bill on their line of credit, about $90,000. They had $350,000 left on their mortgage and had made the decision to stay put for a few more years to be close to family.

Sammu works as a pharmacist and Mandy is an elementary school teacher, and the two have a household income of $180,000 or so annually. The couple’s main goal is to whittle down their debt. They had been paying $10,000 annually to their line of credit while making minimum monthly payments on their mortgage along with an annual lump-sum payment of $12,000. They weren’t sure if that was enough, particularly because they were also saving a lot elsewhere.

Up until this year, Sammu had been contributing $19,000 annually toward savings earmarked for retirement. And then there’s the kids RESPs: The Dhaliwalls contribute $2,500 annually to each of those accounts. But they had no emergency fund and no money in TFSAs. The couple felt they had a good start but really wanted to learn how to prioritize their goals and wanted reassurance that they were making the right choices.

Browse Sammu and Mandy’s progress throughout 2016

Lessons learned

Sammu and Mandy are quick to say that the #MoneyFit experience made them keenly aware that they need to have some time for themselves and not be too aggressive in saving. This was also a key recommendation for them from certified financial planner Jason Heath earlier this year. Heath urged them to consolidate their debt, forget about an emergency fund for now and put the brakes on over-saving in these expense-laden years with such a young family. Having a bit more fun with their family was also a key recommendation. Here’s what Sammu and Mandy learned:

Consolidating debt is a no-brainer. When their $350,000 mortgage came up for renewal recently, Sammu and Mandy took the opportunity to make some key changes to their debt—including their $90,000 line of credit debt payments. “Consolidating our debt into our mortgage was the best piece of financial advice we received,” says Sammu. “It was timely advice for us, and we did exactly that.”

Review life insurance regularly. Independent life insurance broker Lorne Marr advised the couple to beef up Sammu’s coverage from a 10-year, $1.5-million term life policy to a 20-year, $2-million term life policy, mainly because the family is young and needs extended protection. Marr also recommended Mandy increase her term life policy to $1 million from $500,000. The extra cost for upping both polices was just $120 a month. “It will give us peace of mind,” says Mandy.

It pays to ask for help. “A good financial planner provided us with a solution that made sense for our particular financial situation and time in life,” says Mandy. “We learned not to ignore our money problems because it can often make matters worse.”

Reassess family finances regularly. Financial plans should be versatile enough to change as family circumstances change. “Reassess your financial picture regularly. That’s what we plan to do. We didn’t do that for a few years and we found ourselves with debt we hadn’t really planned for. The timing this year was key for getting us back on the right financial track. We let a lot of things slide because we were so busy looking after our kids. Now we have a solid plan and hope to follow through.”

Budget Basics

Everyone struggles at some point with paying off debt and learning to save for the future. Lindsay Tithcotte, an engineering consultant from Kamloops, B.C., was no different. Did she achieve her goal of financial balance? Let’s see how she did.

Making it all work

When we first met Sammu and Mandy Dhaliwall, the Brampton, Ont. couple was in the middle of finding out just how financially disruptive a growing family could be to a sound financial plan. Did they get on track to paying off their mortgage and saving for the future? Find out here.

Wrestling through competing priorities

Shannon Jarrett and her partner Marcin Duran share a home and domestic life in Hamilton, but they’ve been by and large living separate financial lives. They don’t share bank accounts but they do share expenses. Did they get on the same financial foot? Let’s find out.