Financial adviser Andrea Andersen of Edward Jones talks about how you can manage today's expenses and plan for your future

Andrea Andersen is a financial adviser with Edward Jones.

Andrea Andersen

What are the financial implications Albertans may have to contend with when there’s a disconnection between salary and spending?

Andersen: I would first say that this is not an isolated issue but one that we see across Canada. It’s not uncommon for people to feel financially stretched and conclude that they need a higher level of income than they’re receiving.

Sometimes people’s overspending is tied to an expectation of future wealth. A medium income earner who spends without a financial strategy based on expected future wealth could be flirting with disaster if their future doesn’t match their expectations.

What are the factors influencing perceptions on what people envision to be the income needed to live their ideal lifestyle?

Andersen: There’s risk in looking superficially to other people’s lifestyles and using that as a benchmark for one’s own expectations. We all need to be careful about making decisions based on what we see our peers doing – after all, some may be taking on debt to finance their lifestyles. Simply put: living a lifestyle based purely on expectations will lead to disappointment.

If you look at the demographics from the survey, you’ll notice that as people age, their income expectations increase. This is worrisome.

There are some people in retirement who are in debt – who have lines of credit and mortgages on their homes. When working with my clients, I help them develop a strategy to help avoid this. At Edward Jones, we review our clients’ situations, work with them to develop a financial strategy and conduct reviews to help ensure they are progressing towards their future goals rather than spending themselves away from it. =

It’s a wonderful feeling when I see relief and optimism on a client’s face after a successful discussion. I know they truly appreciate it when I’m honest with them and help them navigate through their finances so they can work towards achieving their goals.

What financial strategies should be considered when planning for the future?

Andersen: The first step is to get financially sorted. Find a financial adviser who you can trust and who can help you get organized. A good financial adviser will work with you to determine your goals by understanding what’s most important to you.

At Edward Jones, we would next use an established process to build a personalized strategy – one that’s designed to keep things on track and help you achieve your goals. In choosing a trusted financial adviser, you’re ideally partnering together throughout your life to ensure you stay on track.

The financial adviser should also act as a sounding board and help with questions like “How will it impact me to take that vacation or to buy that car?” There’s value in bouncing these questions off someone who truly understands you and will help you work toward your goals.

Clients are always in charge of their lives and of their money, but they need a financial adviser to help them understand the impact of the choices they make.

Why are Albertans in such financial straits and heavily in debt?

Andersen: Often it comes down to making decisions about buying now on credit rather than saving and buying selectively later. We’re increasingly getting accustomed to immediate satisfaction.

Some people also like to buy and spend because it makes them feel better emotionally.

When we’re not willing to wait or we indulge against our better interests, we can get ourselves into trouble. It’s a vicious cycle, unfortunately.

It also doesn’t help that the cost of living also continues to rise.

A financial adviser can help guide you through those difficult decisions and a changing economy by giving you the information and perspective you need to make the right choices for your future.

What can Albertans do to get out of debt?

Andersen: Everyone who has a debt issue needs to have a realistic view of their situation. They need to seek help from a professional such as a financial adviser. They need help from someone who will put the information into perspective, so they can make informed decisions going forward.

When I work with my clients, I ask them to commit to a strategy and prioritize so they have a clear picture as to what their life could look like by paying off debt and saving towards their short- and long-term goals.

– Mario Toneguzzi

financial adviser

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

You must be logged in to post a comment Login