The Family Financial Planning Book: A Step-by-step Money Guide for Canadian Families

Kathleen H. Brown, a financial consultant, was an associate professor of
Family Studies at the University of Guelph.

Financial planning is a process of identifying goals and developing ways to achieve them. Richard Birch, a financial writer for a large accounting firm, suggests that most middle-income families have four fundamental financial goals: to be prepared for emergencies, to become home owners, to achieve financial security in retirement, and to contribute to their children’s education. This book is not about identifying personal goals, but about ways to reach the four specified.

Birch’s thesis is that many Canadians have some funds, in addition to those needed for necessities, that could be used to achieve important goals if the money were not spent on transitory things that happen to come along. The intent of this book is to remind such people of their goals and show them how to work toward them in an orderly way. If the obstacle preventing people from achieving fundamental goals is not knowing where to start and what to do, Birch offers a solution.

It is assumed that Canadians share the four goals and also a common set of priorities that may be converted into sequential steps to achieve them. The seven steps around which this book is built are: set up a safety net; buy a home; save for retirement; pay off the mortgage; invest for security; invest for gain; save for the children’s education.

Inflation and income taxes, which are identified as the biggest obstacles to reaching financial security, are discussed in some detail. Readers are shown how to adjust yield on investments for the effects of inflation and taxes to obtain real after-tax return. Some of the advice relating to income tax has been outdated by recent changes in legislation.

There are chapters on budgeting, the use of insurance to reduce financial risks, the advantages of buying rather than renting accommodation, maximizing RRSP return, investing, and funding post-secondary education.

In summary, this is a book for the general reader who wants a clearly specified process for reaching greater financial security.