Holiday Spending Trends and Looking Ahead with Community in Mind
In the last few months of 2023,it’s been difficult to get into the spirit of giving with inflation impacting many of our wallets. Many of us in BC and across Canada are feeling increased prices with every trip to the grocery store. People who have never visited the food bank or toy drives before are finding they need extra support this holiday season. Even though inflation is going down, we don’t actually see it yet. Economic times are difficult in Canada right now, there’s no other way to put it.
With the holiday season here, we’re seeing clients spending on experiences rather than goods. We’ve noticed a shift this year with clients enjoying experiences in their communities, with their families rather than exchanging gifts. We are also seeing continued generosity with donations. Many clients have the desire to make charitable donations as they know the stretch many are feeling with the current economy. They’re also exploring various ways to give, whether that is volunteering time, donating new or used goods or making financial donations.
Donations and Taxes
As we approach the end of the calendar year and the individual tax season, we discuss a lot of tax strategies, one of them being charitable giving. We’re noticing more and more clients wanting to donate locally in their communities as they see the positive impacts of their contributions. Understanding the tax benefits of donations is an important piece of wealth management and we encourage clients to explore some of the unique things we can do with investment accounts and donating securities. Rather than cash, there are extra tax savings if you donate securities that have a capital gain. Charitable giving can be beneficial to the individual making the donation as well as those receiving, so now is the time of year to ensure you’re maximizing those opportunities.
Starting Young Building Charitable Legacies
Not all clients are in a position to donate financially but still want to give back. Toy and clothing drives, food bank donations and volunteering roles are other great ways to support. We recommend thinking about items in your home or office that you don’t use any more that could be of great value to someone else. Or spending time volunteering with causes you’re passionate about. We help clients be creative when thinking about what they have to offer whether it’s time, talent or gently used goods. Many local organizations are happy to have support and will work with individuals to identify where skills or time is most valuable.
In the same way that we encourage clients to set up banking and investment accounts for their young kids to begin understanding and accumulating savings, we encourage them to start giving back from a young age. Packing hampers for the homeless, sorting food at a food bank, donating toys they no longer play with or choosing a toy in a store for a child who may not get one are valuable lessons that can begin a lifetime of philanthropy. Finding currency, like toys, that kids can understand will begin building a healthy understanding of needs, wants and abundance. Time is a valuable currency as well so spending time volunteering and the experience of giving back are great lessons to create perspective, empathy and a desire to support your community.
Know Your Cash Flow
As we move into a new year, many people take this time to reflect on their past financial year and plan for the months ahead. Our greatest advice heading into the new year, especially when borrowing rates are where they are, is to understand your cash flow. This is relevant no matter what stage of life you’re in. Really understanding what your financial flows are, what comes in every month and what goes out every month, can ensure you can plan accordingly for events, purchases and establishing or adding to an emergency fund in the year ahead. If the flow isn’t looking as healthy as a client hopes, we’re able to make suggestions for changing investment strategies or earning more money. Knowing what you’re working with is essential.
We’re expecting a recession next year which we hope comes as no surprise to our clients. It might be a softer landing than initially feared but that doesn’t change that every grocery store trip is costing more and more. We work with clients to do the most with what they have, which requires understanding exactly what your cash flow is and how your decisions affect your options.
New Year, Same Values
While buy-in on resolutions may fluctuate, there’s no doubt the end of the year is a good time to check in on yourself and see how far you’ve come in a year. Looking at your spending, your savings, what went well and what could have gone better will help set intentions for the year to come.
We recommend revisiting your values to help determine if your spending was aligned. While values evolve (we support growth and change) ensuring you’re staying true to your core values is important for successful wealth management. It’s also very rewarding when you live true to your values. This allows our clients to prioritize things that are important like family, travel, a new home, increasing charitable giving and more, and then weighing up what is possible in the short and long term. Values also cover more than finances. Investing time is often as valuable as investing money.
Looking Ahead to 2024
As we look ahead, mapping out 2024, we’re optimistic and hopeful. This past year has shown us we don’t really know what to expect, both nationally and internationally. Economic conditions changed rapidly this year and impacted the day to day lives of many. That is only going to be amplified in the coming year so being prepared for the unexpected is important. While we know there are more challenging economic times ahead in our country, we’re looking forward to continued connections, community partnerships and another year of supporting clients to live lives they don’t want to retire from. Supporting clients and seeing their success is why we love this work.
Happy Holidays from Sea Glass Wealth
As our team winds down and looks forward to spending time with our loved ones, we wish you all a peaceful and relaxing holiday season. We hope you’re able to take time for yourself and for the people and community that you care about. Wishing you a joy filled holiday season full of love and dreams for what’s to come.
We look forward to seeing many of you in the new year and finding out what 2024 has in store.
We are looking forward to the opportunity to meet you! For more information, please feel free to reach out.
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