Page 28 - A Canuck's Guide to Financial Literacy 2020

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1. Cash Flow Management

Cash flow planning is all about budgeting. Knowing when your bills are due and having the
cash on hand to pay them without getting into debt. This pillar of financial planning focuses
on reducing expenses and maximizing your cash flow by teaching you how to budget. As
well, you should have first hand knowledge about various income replacement programs
available to you. In this section, we’ve covered cash flow replacement programs such as
Employment Insurance while also discussing issues that matters to you such as reducing
daycare costs, maintain your professional associations and lower your debt.

2. Risk Management

Risk Management is simply insurance. Transferring the risk of potential loss to someone
else – usually an insurance company. Insurance is a great way to protect yourself against
potential loss and financial hardship. We’ve gone in detail to explain the most common type
of insurance – disability insurance, critical illness and life insurance in Chapter 6.

3. Tax Planning

In life there are two things certain, death and taxes. Tax planning involves taking advantage
of tax-deferring investment vehicles and investment strategies in order to save on tax.
There are various tax savings strategies that one could implement such as estate freezes,
tax exempt life insurance, maximizing tax credits and more. We’ve put a great focus on
highlighting all the investment vehicles that will allow you to save on tax.