Le Sexy Tax Season – OH LA LA!

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Mar 1

Le Sexy Tax Season – OH LA LA!

Written March 2014 by Marie DeLauretis

Is it already March? Ah, March, such an exciting month, not only does this month include International Woman’s Day, my Mom’s birthday (Happy Birthday Mom!) and Barbie’s birthday, but it’s also the month we all preoccupy our time with gathering the necessary tax information required by our tax preparers. I can hear the battle cry of all tax preparers across the land as they ready themselves for the hordes of clients who will soon clamor through their doors in search of, no, hoping for a “Refund!!!”

But I am not here to discuss tax preparation, as sexy as tax is, and believe you me, it sure is sexy.  I am not going to remind you of the eligible tax credits to look into such as the pension credits, child fitness credits, first time home buyer credit.  I won’t bother to mention to readers that they should gather their investment tax reports and/or registered investment tax receipts, charitable donation receipts, child care receipts, medical expense receipts including the amounts paid for a private health care plan (that have not been claimed or reimbursed by your health insurance provider).  You will most likely receive a tax planning checklist from your accountant – an exhaustive list of items to gather, so your accountant can minimize your taxes owing and possibly create the distinct aroma of “Refund”.  Can you say “I smell refund?”  That is actually a common joke and saying among Accountants.  I said tax was sexy, not funny.

As a result of busying ourselves gathering the necessary income information, investment statements/reports/slips, expense receipts and if applicable, our debt information and statements to provide our tax preparers in order to file our tax returns by April 30th, I find that our own finances suddenly become paramount, central, pressing even, in any given year.  Why is this?

Perhaps it is because the information gathered compels us to think about our financial goals more closely. Does the information paint a terrible financial picture, conversely, from all the receipts and statements do you see your net worth improving?  Or does it make you question: can I be doing something different with my money? If I spend differently, invest differently, restructure debt differently can I achieve my life’s goals sooner?  These questions dear Rose to the Rescue Readers, are the seeds of thought focusing on Cash Flow Planning – this month’s financial concept.

Cash Flow Planning, what is that? How does it differ from Financial Planning?  Let me breakdown Financial Planning for you.

Financial Planning is an all-encompassing comprehensive process that includes several components such as:

  • Estate
  • Retirement
  • Insurance
  • Investment
  • Tax Planning
  • As well as Advanced Planning (i.e. special needs, adult-dependent needs, education needs)
  • and Cash Flow & Debt Management. 

I use the definition established by the Financial Planning Standards Council (FPSC), the foremost authority for the financial planning profession in Canada that licenses the CFP marks: 

“Financial planning is a process that determines how you can best meet your life goals through the proper management of your financial affairs” 

Cash Flow Planning which includes Debt Management, the newest concept in the financial planning industry, has been making strides in our community, quickly gathering increased recognition among designated professionals and those offering financial services to the public, and is rapidly becoming an adopted practice in the financial planning processes of most financial advisory firms. 

Cash Flow Planning is the process of:

  • Understanding your cash inflows and outflows  (how much money comes in; and how much and where it goes out each month including credit/debt usage),
  • Restructuring cash flow by integrating simple and flexible strategies, techniques and financial solutions to ensure liquidity for known financial goals, and to avoid forced usage of credit or the sale of assets during unexpected costly events, and to achieve your life goals.   

So while you are busy trying to complete your tax filing by the deadline, I would encourage you to begin thinking about your cash flow and debt management plan.

  • Do you have one?
  • Do you think you are making wise spending, saving, and credit decisions?
  • Do you think there is room for improvement in your current financial situation?
  • Do you think your cash flow can operate more efficiently?

More on cash flow and debt management next month, stay tuned!

If you would like to locate a Cash Flow Specialist in your area, do not hesitate to contact me by email at inquiries@delauretis,com