Rita Silvan, editor-in-chief of Golden Girl Finance talks to Rona Birenbaum about how a financial plan is like your personal GPS.


Rona Birenbaum is a Certified Financial Planner and the founder of Caring for Clients. She was recently named a Women of Influence in financial services. She writes a personal finance column for The Globe and Mail and volunteers in the Toronto Public School System to enhance student financial literacy.


GGF: How did you get into this field?

RB: I did a business marketing degree at night and worked during the day as a teller at a credit union. I ended up in management but decided that I wanted client facing work. Then I worked in the brokerage industry but that wasn’t a fit either because it was sales. When my child was born in 1999, I worked from home for 4 months and when I came back I was an independent.

GGF: What are the biggest misconceptions about financial planning and financial planners?

RB: The biggest one is that financial planning is the same as investment strategy. It’s more like life planning through a financial lens. The process is a lot more fun than people think. It’s an opportunity to envision the future and participate in the crafting of that future. I dive into conversations about people’s values and goals.

GGF: What are the most common reasons people see you?

RB: When an important decision needs to be made and the person is either uncertain or is at odds with other stakeholders, we’re the tie-breaker. Also, people who are fast approaching retirement and have less runway to change their trajectory want to know what the future looks like and plan for it.

GGF: What’s the best time to work with a financial planner?

RB: It’s when you don’t need it. Just the same as applying for a line-of-credit when you don’t need it or visiting a doctor when you’re well. If two years after you get your plan done you get laid off, it’s very easy for a planner to recalibrate the plan, like GPS, so you don’t get derailed.


“[Women] have dreams for themselves and they’re not waiting for a partner to make that happen…”


GGF: Why do women take the backseat when it comes to family finances?

RB: For the Baby Boom generation and older, that dynamic is entrenched. In young couples we work with, from their late ‘20s to mid—40s, the division of labour is more based on who is good at what and who wants to do it and enjoys it. Also, there are more 2nd and 3rd relationships and those couples come in with their own assets.

Women are getting much more involved in financial planning and decision making because more of them are single longer. They have dreams for themselves and they’re not waiting for a partner to make that happen, whether that’s home ownership or whatever. They are realistic about the possibility that they may not have a life partner to share financial responsibilities with and they’re okay with that and they’re going to take control of their lives.

GGF: There’s this idea that men are the earners and women are the spenders…

RB: It’s baloney. This came out of a prior generation when men made the money and the women spent it because they did not earn an income. They got an allowance, like my mother. Who’s the spender/saver is not gender specific. Often the reason people come to us is because there is a disconnect: one is being too conservative and the other too frivolous. A planning process can help create clarity and reduce the emotions around that.

GGF: There’s a popular narrative with bloggers about “not spending for a year”. What would you say to people who want to enjoy life without hurting their financial goals?

RB: It’s math. My perspective is about balance. To get to retirement but to have never lived is not necessarily a good move. Together, we figure what you need to do to paint your retirement picture and then the rest is your fun money. People are bombarded with extremes of either frugality or excess. They fail to see that there’s a middle way.

GGF: Do men and women view money differently?

RB: There are no gender differences. You often read how many men are more aggressive with their investments, or women like the security of real estate. People fall into 2 categories: more or less conservative. That shows up in how they invest their money. It’s pretty fixed. A leopard doesn’t change her spots.


“Any business that wants to treat women like human beings has an opportunity to make in-roads.”


GGF: What are some common financial mistakes?

RB: Buying real estate out of country because the sales agent says you’ll rent it out and make a killing. Inappropriate use of leverage in investing and then having to sell something at a bad time and being left with debt. Not being adequately insured: I’ve seen a widow come in with two young children and no insurance. After the financial crisis, it was people who sold when they shouldn’t have sold and people who didn’t invest when they should have. Parents giving too much away to their children and leaving themselves vulnerable…

GGF: Should women have their own separate accounts?

RB: Everyone should have her own chequing account to accumulate money where she doesn’t have to ask anyone to get it or it couldn’t be cleaned out as in a joint account. Plus, if you want to buy your partner a gift, you can do it without them looking at the bill. However, I don’t think money should be hidden from the other. If a couple is building a life together, then completely separating finances means you’re not optimizing your debt reduction or tax strategies. Also, if you’re avoiding some really good financial planning decisions because you’re afraid, then there’s something else going on.

GGF: We’re at a tipping point in terms of financial services targeting women…

RB: It means that the market is big enough to justify the investment. There are enough women who are working and making financial decisions that companies want to target them. Women, from a financial standpoint, have been largely ignored by the industry. I frequently hear from clients that, “the advisor never looks at me, always talks to my husband or treats me like I don’t know anything, like a child.” Any business that wants to treat women like human beings has an opportunity to make in-roads.

GGF: What impact do relationships have on our financial plans?

RB: Huge. Parents teach us about money for the first 18 years. A scarcity mindset or sense of entitlement comes from our upbringing. A lot of repair has to happen after the fact. Siblings can also have a big impact if there’s competition or feelings of dissatisfaction with career achievements.

Of course, choosing your life partner is a big one. Common issues are what each partner’s financial contribution is and their money values. Relationship stability affects our money because divorce is extremely costly. And then it comes back to parents if there’s an inheritance which can be a game-changer.


“…home owners tend to do better than renters.”


GGF: How important is home ownership for financial success?

RB: It’s as much an emotional asset as a financial one. Owning your own residence has an anchoring effect. It gives a sense of being grownup. From a financial viewpoint, it’s a smart move. When we do our financial plans, home owners tend to do better than renters for several reasons: a home is a leveraged investment; the appreciation on a principal residence is tax-free; and it’s a forced savings plan. As long as the real estate purchase is sensible and within the realm of affordability, then it’s advantageous. The caveat is, for people who want or need a lot of geographic flexibility, then the transactional costs can be too high.

GGF: Should people strive to pay off their mortgage before retirement?

RB: Ideally, yes. However, if it’s a modest mortgage at a reasonable interest rate and you don’t want to downsize, then it can work. It depends on your cash flow and the size of the asset. I would say that people shouldn’t expect to extract a lot excess cash from their property unless they plan to downsize and move to a much smaller town.

GGF: What was one of your financial mistakes?

RB: In 1989, my boyfriend at the time and I bought a pre-construction condo. By 1991, the value dropped so we couldn’t get financing unless we came up with another 25K which was a lot of money then. I had to borrow it from my Dad and it took me 15 years to pay him back.

GGF: What do you scrimp on?

RB: Clothing. I buy consignment. I buy nice clothes but won’t pay the retail prices. Also, I buy a modest vehicle that I’ll own for 10 years.

I used to be an over-scrimper. My mother grew up poor and is afraid of never having money. I shed my overly frugal mindset when I married my 2nd husband because he knew how to live. That’s when I started travelling. I like the balanced approach much better.

GGF: What do you splurge on?

RB: Art, wine, travel. I collect wine. I love art. For me, art is actually a very sensible splurge. I don’t buy it for its appreciation potential but because it feeds my soul.

GGF: What spending lesson would you give your 25-year-old self?

RB: Respect how hard you worked for the money and take better care of your things so they last.

GGF: At 95-years-old, looking back, what would you appreciate about your life?

RB: That it felt good to give and share with others.