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A conversation with Janick Gagnon, advisor and mutual fund representative at the New Richmond branch.
3-minute read
Q: Janick, can you tell us about the basic advice you give your clients on the topic of saving?
A: Sure. First and foremost, I suggest they look at saving as an objective they set for themselves and aim to accomplish. In other words, you should plan to put aside a specific amount to finance those projects that are important to you. This includes payments for the car, the house and other needs. But don’t forget to pay yourself. What I mean by that is you should view saving as a form of financing for yourself.
This leads me to mention 3 key notions about saving: commitment, consistency and discipline. You need to start saving early on, but above all, you need to start! Otherwise, there may be a tendency to keep putting it off. There are many reasons why people avoid putting money aside: the need to pay off bills, dealing with the constantly rising price of goods, etc. This can lead us to neglect our savings.
Tip: When a regular payment comes to an end, for example the end of a car loan, you can seize the opportunity to grow your savings by staying in the habit of putting aside that amount.
Q: As an advisor, what do you think is the best way to save up for a specific project?
A: It all depends on the project. You should first meet with your advisor to establish what your plans are. A good way to get a clear picture of the situation is to assess your financial health. Do you want to save for your retirement? If so, contributing to an RRSP may be an appropriate solution. A TFSA is another solution to consider. If you want to finance your children’s education, you need to look at contributing to an RESP. Savings objectives usually fall into 1 of 4 categories: emergency fund, major projects, children’s education and retirement. Your advisor will make recommendations based on your discussions, your savings objective and your ability to save. Together, you can come up with a savings plan and determine the amount to set aside as well as the best investment for you. Whether it’s for a short-, medium- or long-term project, it’s important to put in place a solid savings strategy.
Q: How is an automatic savings plan a good way to save?
A: An automatic savings plan is an excellent way to save because it’s simple, flexible and effective. Here’s how it works: Automatically withdraw a set amount from your bank account and invest it in an investment product suitable for your investor profile and at a frequency that you choose. It can be changed anytime to suit your needs, whether it’s how much or how often. Because your payments are automatic, your savings will grow without having to think about it.
Q: Is there a recommended payment frequency for a savings plan?
A: There is no standard or recommended frequency. How often you choose depends more on your habits and your income. The easiest way is to match the frequency of your pay or income. In fact, most people prefer allocating a portion of their main income stream to savings, whether it’s monthly, biweekly or weekly.
Q: Can you explain the benefits of a savings plan?
A: A savings plan is designed to meet your needs. You establish the amount and the frequency. It’s often easier to divide a large amount, which represents your savings goal, into small payments. It’s also seamless, because the amount allocated to savings is withdrawn directly from your account. Various options are available to you, including mutual funds if you’re saving for a long-term project, in which case you can take advantage of market fluctuations. Regardless of how much you can put aside for savings, the important thing is to start. The easiest way is to choose a frequency that matches the deposit of your pay, a way to pay yourself first, and your savings capacity.
New investment accounts are offered by LBC Financial Services Inc. (LBCFS). Mutual funds are distributed by LBCFS. The Financial Planning service is offered by LBCFS. LBCFS is a wholly-owned subsidiary of Laurentian Bank and a legal entity distinct from Laurentian Bank and Mackenzie Investments. Mutual funds offered by LBCFS are part of the Laurentian Bank Group of Funds managed by Mackenzie Investments. A Laurentian Bank advisor is also a licensed LBCFS Mutual Fund Representative.
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