Losing your job can be one of life’s toughest setbacks. Navigating it with clarity requires taking time to process your emotions, understand your legal rights and seek professional advice — key steps to getting your career and finances back on track, experts say.

Like mourning a death, getting laid off can drag you through the classic stages of grief: denial, anger, bargaining, depression and acceptance. The loss of your job means not only a loss of income, but also workplace friendships, identity and purpose.

“People don’t always equate grieving with job loss,” said Farah Kotadia, founder of Wellness Works Counselling in Vancouver.

“By sitting with our grief, we’re actually reflecting as well, and we’re thinking about our next steps … so take the time to grieve.”

If you miss certain co-workers, Kotadia suggests reaching out. “In a job, there’s always pieces that we like and pieces that we don’t like, so what resonated with you? Where does passion come in?” she said.

Grief in the context of job loss could take a couple of weeks, a few months or even a year to process, Kotadia said. One day, you may feel hopeful sending out five job applications with cover letters; the next day, you may not want to get out of bed.

“That’s OK. That’s normal. That will happen,” she said.

While emotions can run high immediately following a layoff, employment lawyers advise against acting on them.

“I don’t want people to take this opportunity to tell their bosses everything they hate about them or bad-mouth the company to others,” said Lior Samfiru, national co-managing partner at Samfiru Tumarkin LLP.

“All of those things could bring legal action against the individual, but equally as important, may make it that much more difficult in resolving a severance issue.”

Samfiru said individuals and employers alike often misunderstand provincial employment standards, which commonly require workers to be paid one week of salary per year of employment.

But those standards are just a minimum.

After considering your age, tenure with the company, industry, medical conditions and the current unemployment rate, severance could be 10 to 20 times higher than what’s outlined in employment standards, Samfiru said. That’s why any documentation providing a holistic view of your income — such as your employment agreement, bonus plans or commission payouts — is key to estimating your severance entitlement.

Samfiru, whose firm’s website has an online severance pay calculator, advises getting legal advice when faced with job loss, as 90% of severance packages initially offered by companies are “inadequate.”

He said he’s worked with clients offered one month of severance when they were entitled to six.

“Those are the gaps we see. They’re significant,” he said.

Severance offers also come with a deadline for acceptance, but Samfiru calls this a common “pressure tactic” used by employers.

“Your legal rights don’t expire on Friday at five,” he said. “In fact, you have two years.”

Value of professional financial advice

It doesn’t hurt to seek professional financial advice, too. Andrea Andersen, a Calgary-based certified financial planner at Edward Jones, encourages this, especially among younger workers.

“Millennials tend to want to be more independent. They want to be self-directed investors,” she said. “But it’s these times where it’s important that you start building a relationship with (an advisor) who can help direct you.”

If you have monthly car payments or credit card debt, for example, Andersen said an adviser can help you present a game plan for the bank on how to meet those obligations.

Advisors may recommend halting RRSP contributions temporarily to improve your cash flow or structuring your severance in a tax-efficient way.

For example, you may want to defer receiving your severance to a low-income-earning year or roll over your severance into your RRSP to avoid paying tax in the current year.

“Usually, it takes a lawyer to broker these types of arrangements, as neither employee nor employer tend to think about it,” Samfiru said.

While a job loss can leave you feeling financially vulnerable, Andersen and Samfiru agree the benefits of seeking professional advice outweigh the costs. Legal fees are tax deductible if they’re incurred for the purpose of collecting wages. Often, the final severance settlement will include compensation for legal fees on top of the severance amount, Samfiru said.

He also recommends applying for EI immediately.

“While you cannot get EI and severance for the same period, EI can kick back in if the severance runs out and you’re still unemployed,” he said.

Andersen, who also has experience in resilience training, highlights three traits that may help you get out of a post-layoff rut: being positive, having a sense of control and having a support group.

She advises defining small, achievable financial goals and building specific expectations for your next role.

“When you know what you’re looking for, when you have your reason why, then the motivation will be easier,” she said.

When any service is offered for free, it’s good to know why.

In the booming market of buy now, pay later (BNPL) financing, those opting in generally get to spread payments over a number of weeks at no cost, because merchants pay for the service in the hopes it will convince consumers to spend more.

That’s certainly the promise providers like Affirm and Klarna advertise to businesses, touting a near 20% boost to order totals, while Shopify says its instalment program can lead to up to a 50% boost in average order value, plus up to 28% fewer abandoned carts.

While the option can add convenience at possibly no direct cost to consumers, financial experts warn it’s far from risk-free.

“The temptation is very great to overspend,” said insolvency trustee Doug Hoyes.

With the option popping up during online checkout or being offered by a cashier, consumers are also not necessarily fully thinking through the decision and the implications of what they’re agreeing to, Hoyes said.

“For the vast majority of people, you are taking on debt without really realizing it. You’re not making a conscious decision that yes, I will borrow that money. And that’s dangerous, obviously.”

Credit score implications and evolving reporting practices

While most buyers pay off those debts — which tend to run in the hundreds of dollars rather than the thousands — there’s also a rising push to have the data shared with credit-reporting agencies, creating new areas of risk.

Last week in the U.S., reporting giant FICO said it was launching its first credit scores that incorporate BNPL data.

And in April, Affirm said it would start sharing data with TransUnion in the U.S., with a goal to do so in Canada as well, said spokesman Brian Levin.

“We believe that reporting to credit agencies supports responsible lending and promotes positive credit outcomes,” he said.

In Canada, Equifax said its credit reports have started to include data from some BNPL lenders, which may be used in the calculation of credit scores.

TransUnion said it’s still in the development stage of figuring out how to integrate BNPL data, including creating a separate section on credit reports to reflect the unique nature of these products, said spokeswoman Hyunjoo Kim.

While work progresses to add BNPL to credit reporting, some providers have raised concerns.

Klarna said in March 2023 that it wasn’t sharing data with U.S. credit-reporting agencies because BNPL doesn’t fit in well with other types of loans.

The company, which confirmed it doesn’t share data with Canadian agencies either, said adding BNPL to existing credit-reporting models could leave consumers worse off.

“As there is little clarity on the potential long-term impacts to the consumer, we believe this approach is too risky,” the company said.

Other providers, like Afterpay, also say they don’t provide any data to credit-reporting agencies. Sezzle said sharing data with ratings agencies is an option for those who choose its Sezzle Up program to build their credit.

The varying approaches to credit reporting are also a reminder of the variety of other subtle policy differences between providers that consumers should consider before signing up.

Some, like Klarna, charge a small late fee and send unpaid debts to collection agencies, while others, like Affirm and Afterpay, lean more on halting further purchases until older bills are paid.

Most providers are also increasingly offering longer-term loans, with rates ranging from zero interest into the 30% range. Some are striking partnerships for bigger-ticket items like exercise equipment and flights, making for a potentially risky transition to higher debt loads.

The risk of stacking and managing multiple loans

Just the fact that there are so many providers also raises the risk of stacking them and having to keep track of multiple accounts of debt, said Natasha Macmillan, Ratehub.ca’s head of everyday banking.

“Because of the zero-interest appeal, it almost gives people a false sense of affordability,” she said.

“The real caution I would provide is ensuring that, if you do have one, or multiple, you’re looking at the total cost of all of the buy now, pay later programs that you have ongoing, to ensure that you can actually cover the cost of each of them.”

The strain of those cheap loans is starting to show for some providers. Klarna’s most recent quarterly results showed a 17% increase in consumer credit losses, and its overall losses doubled, raising concerns it could be the start of wider industry trouble.

But the company’s credit loss rate was still only 0.54%, showing the vast majority of borrowers are still repaying their debts.

The bigger question is whether consumers are spending more than they meant to — and if money they had planned to put elsewhere is now going toward paying back those purchases.

To avoid a pile of unexpected bills, Hoyes said the key when shopping is to think ahead.

“There’s nothing wrong with using a credit card or buy now, pay later or a car loan or a mortgage or anything like that. It’s when you don’t have a plan — when it becomes an impulse purchase when you’re standing at the store — that’s when you can get into a bit of trouble.”

It’s a comment sometimes heard by Julia Chung, an advice-only financial planner at Spring Planning in Vancouver.

Her retort: “It isn’t about you. It’s about the people that you leave behind.”

Having a well-thought-out estate plan is “one of the most loving things you can do for your friends and family,” Chung says.

And it goes far beyond drawing up a will laying out who gets what when you’re six feet under.

Chung says there’s also planning that must be done for when you’re still among the living, but may have lost the ability to make your own decisions due to dementia or other conditions.

People are living longer thanks to advances in science, “but not all of us are going to live really well,” Chung says.

A power of attorney is set out in a document entirely separate from a will and doesn’t automatically default to a spouse or adult child.

There are also financial assets that fall outside a person’s will that need to be sorted out — like beneficiary designations for life insurance, RRSPs and TFSAs.

The last thing a bereaved loved one wants to do is go on a wild-goose chase for the information they need to tie up financial loose ends, so some of Chung’s clients put together a binder with key information.

“What information do they need? Just having a will isn’t going to tell them where you bank or how to access your mail or who your investment adviser is,” says Chung.

“So how do we get that information to them?”

Another aspect to think through is how and when any minor children left behind can access their inheritance.

Chung recommends structuring a trust so a young person gets the funds in staggered amounts, not in one big lump sum.

“As I always say to my clients when I see this, ‘Think back to when you were 18 or 19. Were you making really smart financial decisions? Because I wasn’t,'” she says.

Last month, IG Wealth Management released its annual estate planning study, which suggested 54% of Canadians lack a plan.

Twenty-nine per cent of respondents said their reason for not having an estate plan was a perceived lack of wealth.

“Ironically, I think that in many cases, it’s the people who don’t have sufficient wealth yet that need to think about estate planning the most, especially if they have dependents,” said Christine Van Cauwenberghe, IG’s head of financial planning in Winnipeg.

Forty per cent of respondents reported having legal documents in place to safeguard their finances should they be diagnosed with cognitive decline.

The survey was conducted online by Pollara Strategic Insights, polling 1,017 adult Canadians between April 10 and 21. The polling industry’s professional body, the Canadian Research Insights Council, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Van Cauwenberghe says estate planning can be more complicated in blended families. For instance, it could be all well and good for someone to designate a partner as a direct beneficiary for a life insurance policy.

But if that partner passes away, children from a previous relationship may be “completely disinherited,” she says.

“It’s usually inadvertent, but it’s just due to a lack of planning.”

Another item to check off the to-do list is to choose who can serve as executor of your estate, power of attorney and guardian to minor children.

It’s not necessarily best to have the same person do each job, and it may not make sense to appoint someone close to you.

“I think sometimes people choose their executor because they think that person will be offended if you don’t choose them. That person would probably be relieved not to be chosen,” says Van Cauwenberghe, adding corporate trustees are an option when there’s no one willing or able to take on the tasks.

“It’s a big job, and understand that most people don’t have any experience in it. They don’t know what to do, they delay, they make mistakes, they don’t reach out to the right experts and it can be very stressful.”

Van Cauwenberghe says it can be tough to put these difficult decisions at the top of the priority list.

“If you never set aside the time, it’s never gonna happen,” she says.

“But you’re not going to be the one to pay the price. It will be your loved ones who will pay the price for your lack of planning.”

To someone who doesn’t have a lot of assets, knowing their net worth might seem pointless, but experts say it’s an important indicator of financial health, no matter how big or small the number. 

“At the end of the day, it’s not about how many zeros you have, it’s really about whether the net worth you have reflects that you’re on track toward your financial goals,” said Brenda Hiscock, a certified financial planner at Objective Financial Partners. 

Your net worth is measured by adding up the value of all the assets you own and subtracting your outstanding liabilities. The result gives you a snapshot of your overall financial picture.

Assets can include money in your bank account, investments, the value of your home and other properties, the cash value of a life insurance plan, the resale value of your vehicle and any pension plans. 

Liabilities are essentially what you owe and can include the mortgage on your home, lines of credit, credit card debt, student debt and auto loans.

Hiscock says when it comes to your liabilities, it’s important to distinguish between good debt and bad debt.

“There’s good debt, sort of, a mortgage, student loans because a student loan can increase your future earnings potential. But what we really want to look at on a net worth statement is whether there’s credit card debt … that tends to be bad debt,” she said. 

“The net worth statement helps us to really look at each piece and determine what the best way forward with them is.”

She says a typical timeline to review a net worth statement is once a year. 

For a young person starting out who may have few assets, or even a negative net worth, Hiscock said there are still benefits to tracking your financial health.

“I work with quite a few young people and I do find they love seeing their net worth year-over-year. It’s motivating to them,” she said. 

Tony Salgado, president of AMS Wealth, said a net worth statement can also be a wake-up call that your financial well-being is not moving in the right direction.

He gives the example of someone who gets a raise or a promotion at work, but ends up spending the extra income on dining out and other discretionary expenses instead of building up their assets.

“So even though in this situation you have someone that has more cash flow coming in, they’re spending more,” he said. 

“In that case, their net worth is not going to be growing. They’re going to be decreasing their net worth. It’s important for that young person to see if they’re going in the right direction.”

For someone that wants to build their net worth, it comes down to putting more money into the assets side rather than the liabilities.

“Step by step, if we manage our discretionary spending, we improve our cash flow, we take the cash flow and invest it in either a TFSA, RRSP or an alternative investment — you’re slowly now moving your net worth in the positive direction,” Salgado said. 

In addition to being a key indicator for your own use, knowing your net worth can also be crucial information for other professionals, such as a lawyer working on your will or gauging how much life insurance you may need, Hiscock said.

“For example, young people out there buying homes, and if they have a young child, life insurance is so, so important. The net worth statement can say, ‘OK well we have this much debt and if we pass away, we want to have that protected and we also want to protect our future income,'” she said. 

Sibling relationships can be complicated already — after a messy inheritance, they can get worse.

Josh Sheluk’s best advice to parents is to make their estate plans simple and transparent, and to communicate them clearly. But that’s an ideal scenario and not necessarily the norm, said the portfolio manager for Verecan Capital Management.

“Let me start with saying this: roughly half of adults in North America don’t have a will,” Sheluk said. “Of the half that do have a will, I’d say there’s probably a roughly even split between ones that go very, very well, and ones that have some complications or issues associated with them.

“There are often, way too often, surprises along the way or complications that arise,” he added.

Since parents are in control of the process, children might be left in the dark and potentially picking up the pieces during an emotional aftermath. The best bet for siblings is to communicate with each other — if the parents haven’t done so — especially if one child has more information.

“In many situations, you might have one sibling that is the executor of the estates, and the other is not,” Sheluk said. “So just being transparent — that other sibling is not going to have access to the same information as the individual who’s the executor.

“Having that executor lay things out in a very transparent way, communicating along the way, showing the other beneficiaries. Saying: ‘Here is what assets exist. Here’s where we are in the process. Here’s the tax bills that need to get paid.’”

With rare exceptions, all of this information should be legally shareable. Patience with the process and each other is also a wise practice, Sheluk added, as sometimes it takes years to settle an estate.

Not all siblings get along, however, said Tracey McLennan, director of the client consultation group at Edward Jones Canada. There could be childhood dynamics and resentment that has lasted into adulthood which might come into play within the will. Siblings may even be estranged.

“I think that there’s an opportunity (to have) a bridging conversation, if you’re able to reach out and say, ‘Hey, I know it’s been years. I know that we’ve not connected, but Mom and Dad, they’re getting a little older … I’d really love to use this as an opportunity for us to reconnect and have some conversations,’” McLennan said. 

Reaching out may not work for every sibling, she noted, but individuals can at least keep up on their own roles and responsibilities, including seeking professional advice.

“Making sure that you’re informed, making sure you know your responsibilities, making sure that you’ve got the information that you need, whether you’re executor or not executor, and attempting to get the outside assistance you may require,” McLennan said. 

Often, settling estates require tax, legal and financial planning advice, she added.

If there’s a vacuum of information from the parents, it may be natural for children to fill that gap with assumptions or potential reasons for decisions in the will. McLennan has seen children “blindsided” by inheritances and witnessed the aftermath as siblings blame each other.

“Sometimes, if we don’t have enough information, we fill in the back story, and we might be wrong,” she said. “Sometimes we take what we receive as a proxy for love: ‘Mom loves you best. She left you the business, she left you the farm, she left you more.’”

But that’s a mistake, McLennan said, as there are many considerations that children may not realize. In her conversations with parents, they are also concerned about their children being negatively impacted by an inheritance, and they often look at other members in the family, not related by blood — such as spouses. 

Ideally, parents should have communicated their intentions clearly to avoid any misunderstandings, McLennan said, but when that’s not the case, avoid the blame game, avoid relationship breakdown. Support your sibling, communicate, and keep the family together — the latter is a priority, she added.

“When we speak with parents, actually, one of the things I often hear is, ‘Regardless of the wealth, regardless of what we want to have passed on, we want to make sure that our family still can get together for the holidays,’” McLennan said. “That’s actually the most important thing.”

Despite these sentiments, parents unfortunately might not understand how their reticence to discuss their estate plans will actually play out for their children, according to Sheluk.

“I hear a lot from parents, ‘My kids get along well today, they’re going to be just fine with whatever happens in the will,’” he said. 

“I think that’s totally the wrong mentality and perception to have. … Money does weird things to people, especially during high-emotion times, and that can lead to your kids who have previously had a great relationship to not having a good relationship anymore.”

A simple copy and paste of your 2024 budget isn’t enough to help you achieve your goals and maximize your finances for the new year, experts say. 

“Things don’t stay the same. Prices keep going up,” said Jessica Morgan, founder of financial literacy site Canadianbudget.ca.

“You want to go into (the) new year with a new plan,” she said. That means auditing and budgeting. 

“First, you have to look back on the year that we’ve just concluded,” she said. “Take a look at your spending for insights.” 

Tracking spending patterns in your current budget can provide insight into the coming year. But if you haven’t started tracking everyday spending yet, Morgan suggests going back to review your bank and credit card statements.

An audit on all subscription costs is next on the list. 

“Services that you subscribe to are probably raising their fees,” Morgan said. “It’s a good idea to take a look at what you already are paying for and what you’re subscribed to.”

Janine Rogan, a chartered professional accountant and CEO of the Wealth Building Academy, agrees. “We somehow end up subscribing to probably more things than we actually need.”

Negotiating any bills such as cellphone plans, bank fees, or insurance costs can also help lower your expenses, Rogan said. But if you can’t negotiate, she suggested “looking at ways to add value,” such as adding more data to an existing phone plan.

The review stage sets you up for the next step: setting new goals.

“What do you want to enjoy and accomplish this year and how much money do you need to pay for that?” Rogan said. 

For example, if the goal is to have a maxed-out tax-free savings account — which has a renewed contribution limit of $7,000 for 2025 — dividing that amount across 12 months will make it achievable.

“That’s $583 a month,” Rogan said.

That savings method can apply to any other financial goal — a vacation, buying a new vehicle or even starting to plan for the next holiday season. 

“Automating it and making it happen in small chunks early on can be really valuable,” Rogan said.

There’s one more “unfun” piece of preparing for a smoother financial year, she said: Figuring out if you will owe money for income taxes. 

To get a rough estimate, she suggested taking the final paystub of the year, which should include a breakdown of your yearly salary, and putting the amount into a tax calculator. 

“It will give you a good estimate of whether or not you’re going to owe,” Rogan said.

“I tell people to do this early in January so that come April 30, you’re not scrambling to pay thousands of dollars (and) you’ve had four months to save up,” she said. 

Saving for tax time is especially important for freelance workers and others who don’t have tax automatically withdrawn by their employer.

For budgeting, Rogan said it’s important to be holistic and look at money overall on either a quarter-to-quarter basis or an annual basis — allowing more room for flexibility, and ebbs and flows in cash flow, rather than setting a strict weekly budget. 

“You might have extra income one month, you might have extra expenses the next month and sometimes, those things are unexpected,” she said. 

“We can’t plan for them but sometimes, we can take that yearlong look at a spending plan.”

That still requires a routine check on the budget weekly, biweekly or monthly — whichever works for you.

A budget or finance buddy can also help you stay on track with your goals, experts say.

Kelley Keehn said she often schedules financial check-ins with her spouse on bigger goals. 

“What I do with my husband at the year is, we go, ‘What are all the things we need to do financially?’ said Keehn, a financial educator and founder of Money Wise Workplaces.

“Maybe we need to set goals. And we just drink some wine and write everything down,” she said.

Once the goals are set, Keehn sets reminders every few months to revisit them. 

Even if there’s no time on the day it’s scheduled for, Keehn said at least the task would not get lost in the noise or feel so overwhelming — and can be rescheduled for a future date. 

While it’s never too late to start tracking money, Morgan said it’s becoming more important to do so as the cost of living keeps going up.

Most people feel motivated at the beginning of the year, she said. So, she suggested picking a method that works for tracking money — an app, spreadsheet, computer software or simply pen and paper — anything that “fits into your everyday life.”

She added: “It’s a pre-emptive step to make things easier throughout the year with your finances. I would say it’s a great time to get started.”

Growing up with a single mother, who was one of Edmonton’s first female wealth advisors, Jane Alm learned how money works at a young age.  Her mother taught her the value of hard work and budgeting, and how to avoid racking up debt, among other lessons. 

“She made me strong. She made me resilient,” said Alm, senior wealth advisor with National Bank Financial Wealth Management and a member of the Angus Watt advisory group in Edmonton.  

“I learned to always understand what I needed versus what I wanted.” 

As a mother herself now, Alm has set out to teach her children the very same principles.  

While other parents may not have the same level of financial literacy as an advisor, they too can play a key role in shaping their children’s understanding of money. 

But where and when to start? 

Parents should begin teaching their children about money as soon as they start to talk, Alm said, adding, “Habits are ingrained.” It’s important to note that every child is different, so they require approaches that are tailored to their capabilities and age group.   

One exercise Alm recommended for parents with little kids is going to a grocery store with $10 in play money and asking their child to pick their favourite fruit, cereal and snack to spend it on.  

After they hand over the play money required to purchase these items, the parent can help their child figure out whether they made the most cost-effective decisions or if they could have stretched their money some more by selecting cheaper items. They can also discuss the importance of saving.  

“Every time they buy something, they have to give you some of that play money,” Alm said, “so they can see that tangibly — that if you spend it, it’s gone.” 

With teenagers, she recommended giving them money to teach them how to manage it. 

For example, Alm gave her son $200 to spend in one school year on clothes. She said he spent it all in one go on a pair of shoes, a pair of jeans and two shirts. Although those clothes had some noticeable wear and tear halfway through the year, she made her son wear them until the end of the school year to teach him that money is finite. 

She gave him the same amount the following year. Her son came home with three pairs of shoes, four pairs of jeans and five shirts, along with some leftover money.  

“He said, ‘Do you want it back?’ And I said, ‘No, keep it. You might need it for later in the year.’” Alm said.  

“By the end of the school year, he still had money left and he said, ‘Do you want it back?’ And I said, ‘No, you’ve earned it. You can keep it. You now know how to manage money.’” 

Communication is powerful 

Parents can talk to adult children about more complex concepts such as how to invest, what dividends and capital gains are and what’s in their will, Alm suggested. 

“We have to be able to talk to our kids about [these difficult topics], and we have to have our kids willing to talk to us about them,” she said. 

Jeet Dhillon, senior portfolio manager with TD Wealth in Toronto, also recommended talking to children about money early on. 

Parents can start young kids out with a piggy bank or youth bank account to show them what it means to spend and save money while familiarizing them with the banking system, she said. 

They can also teach children discipline by having them do chores or eventually get a job to earn money and pay for things outside of their necessities, Dhillon recommended.  

“Especially in a world today, where there’s just so much available through social media, … you need to have even more discipline about what you actually need versus what you want and making sure that there’s some balance there,” she said. 

For adult children still at home, Dhillon suggested having them contribute to household expenses in some shape or form. If they’re studying and/or don’t have an income, they can contribute by helping out around the house.  

“If they’re living at home longer, don’t let it be a free ride, because the kids are maybe getting that false sense of security that, OK, room and board are free, groceries are free, and now I can spend all the money that I have on everything else,” she said. 

Teach them how to budget 

Another exercise Dhillon recommended, which she did with her daughter who started university this year, is creating a budget on a spreadsheet with your child and reviewing it with them on a periodic basis. This, she said, will hold them accountable and make them aware of where their money is going.  

“The transfer of wealth that’s going to happen to that next generation, it’s quite alarming in terms of the numbers,” Dhillon said. “You want to make sure that they are equipped to handle that wealth.” 

Don’t be a teacher 

The Canadian Foundation for Economic Education (CFEE) provides free financial literacy resources for Canadians of all ages, including resources for parents to discuss money with their kids. In 2018, the non-profit organization surveyed more than 6,000 — aged 12 to 17 — across Canada and asked them if they want to learn about money, and if so, from where.  

Based on the survey findings, CFEE president Gary Rabbior said it was “extraordinarily clear that young people really want to learn about money” and given several options about where they wanted to learn about it, including TV, games and the internet, the No. 1 source that was selected was at home from their parents.  

“They learn about so many other things, and they wonder, why the heck am I not learning about this?” he said. 

But Rabbior emphasized that parents need to have money conversations with their children in a way that is fun and engaging, rather than trying to do directed learning with them like a teacher would.  

“Trying to be a teacher … often turns kids off,” he said. 

He suggested using real-world examples, such as shopping for replacement household items. Taking their kids shopping with them, parents can compare different items and explain to their children why they cost as much as they do, noting the labour and manufacturing process that goes into each.  

Parents can then spark up another conversation about what their children want to do for a living based on their hobbies and interests, Rabbior said.  

“You can take a small thing like that and just run with it and help them learn so many things in one fell swoop about different aspects of money and value,” he said.  

Parents who have adult children that have moved back in with them should take advantage of the extra time they have with their offspring to guide them through their finances and career, Rabbior recommended. He noted that many young people in Canada pursue post-secondary degrees without considering their career prospects and whether their field of study aligns with their passions, but parents can help them navigate the evolving labour market. 

And again, start them young, “because behaviour development is easier than behaviour modification,” Rabbior said. 

“If you can build that money relationship, it can come in really handy later on, when kids are already comfortable enough coming to you if they’ve got a problem, if they’ve made a mistake, if they have an opportunity,” he said. 

For parents who lack financial literacy themselves, Rabbior said there are many free resources available online that can help them find their footing. 

“There’s a whole host of ways in which parents can quickly get up to speed and feel pretty smart when it comes to teaching their kids about money,” he said. “It doesn’t take a lot.” 

You’re a few weeks into your new job and payday has arrived.

But reading your first paystub, it’s a little unclear what all of these deductions mean.

After all, the exact amount of your biweekly direct deposit never came up in the interview process.

Financial planning experts say understanding how deductions are calculated on a paycheque is vital for employees budgeting their money, especially those just entering the workforce or new to Canada.

Employers are responsible for collecting certain mandatory deductions from an employee’s total earnings and sending those to the Canada Revenue Agency. Employees are credited for having paid those amounts when filing their annual tax returns.

Gaetano Gagliardi, government relations and policy lead for the National Payroll Institute, said a common misconception is that people expect their “take-home pay to be closer to their gross pay.”

Gross pay refers to total earnings for a pay period not including deductions, such as income taxes or pension plan contributions. Take-home pay, or net pay, is the amount of money the employee actually receives.

“Unfortunately, a lot of people just think about what’s being deposited into their bank accounts and don’t really look at everything that goes into that calculation — so not only your gross earnings, but all of those deductions that bring it down to your net pay,” said Gagliardi.

“It’s a known fact that a majority of Canadians don’t even read their pay statements. So if you’re not looking at your pay statement, then you don’t have that ability to plan, to budget properly.”

A survey commissioned by H&R Block earlier this year found more than one-in-three Canadians say they don’t know how to check how much tax they should be paying on each paycheque.

In addition, 35% indicated they don’t feel confident they would notice if their paycheque had an error in the tax deduction amount.

“There are more than 400 credits and deductions, so there’s a lot of elements to look for,” said Yannick Lemay, a senior tax expert at H&R Block.

“Always take a look at your paystub because a lot of people don’t even go online to get them or to look at them.”

Employees should expect multiple statutory deductions in each paycheque, starting with federal and provincial income taxes.

Statutory deductions also include Canada Pension Plan or Quebec Pension Plan contributions, as well as employment insurance premiums.

“Those make up the bulk of deductions from your pay, with income tax generally being the biggest chunk coming off your gross pay,” said Gagliardi.

Lemay added that any deductions appearing on a stub are also listed on a T4 document, making it easy for employees to claim those amounts on their annual tax returns.

Other possible deductions fall into three categories, said Gagliardi. 

Union requirements, if applicable, mean a portion of wages go toward union dues.

Organization-specific policies might mean there are regular contributions toward a charity, a registered retirement savings plan, or a social committee.

Lastly, there can be legal requirements, such as paying outstanding tax debts, family support payments or wage garnishments.

Ann-Marie Cary, director of global payroll and time solutions for Scotiabank, said other common paycheque misconceptions include employees believing some statutory payments, such CPP or EI contributions, are optional.

“These are mandatory statutory deductions for which every employer has a responsibility to deduct from the employee and remit,” Cary said in an email, adding employers must also contribute an additional percentage on behalf of each employee.

She noted that employees who work remotely without a requirement to report to a physical office will have taxes calculated and deducted from their pay based on the province in which the payroll is processed, rather than where they reside.

Gagliardi said it’s imperative for employees to review their pay statements and become familiar with where their hard-earned money is going.

Doing so not only paints a more accurate picture of their true take-home pay, but can also prevent an employer’s error from going unnoticed.

“Just having a basic knowledge of the deductions that go into your pay will help you understand or foresee what your net pay will be going forward,” he said.

Whether you already have insurance or you’re looking for coverage, you may need help understanding the various players in the industry. Here’s a handy guide, mostly related to life and health insurance.

Insurer. An insurer is a company that creates policies to take on risks (death or illness, for example) in return for premium payments. Insurance companies are regulated at the federal, provincial and territorial levels.

Client. A client is a current or prospective insurance policyholder. Clients may also include other policy beneficiaries and claimants with a legitimate interest in a policy.

Life agent (captive versus independent). A life agent sells life insurance and must have passed a life insurance program and be licensed by the relevant provincial or territorial regulator. (More generally, “agents” sell various types of insurance.)

Career agents, also known as exclusive or captive agents, are employees of a specific insurer and sell only that insurer’s products, for a commission. These agents can also be self-employed with an exclusive agreement with the insurer.

Independent agents can sell insurance from several insurers (also for commission). They generally place their business through managing general agents (see below), which review applications, submit them to insurers, and collect and allocate premiums.

Managing general agent (MGA). MGAs are intermediaries between agents and insurers. MGAs process business submitted by agents and facilitate communication between insurers and agents. Insurers can delegate oversight functions to MGAs, including the screening, training and monitoring of agents.

Medical professionals. A life insurance application may require a doctor’s statement if the person whose life is being insured (the “life insured,” who isn’t necessarily the client as defined above) has a specific medical issue. The insurance company pays any fees the doctor charges for preparing an attending physician’s statement, which is sent directly to the insurer. The statement includes a summary of the life insured’s medical history, description of current health and treatments, and prognosis for ongoing issues.

If the insurer still has concerns about the life insured’s health, the insurer may ask for a medical exam. The exam could include fluid tests, electrocardiograms or other tests. The insurer will pay for these tests.

Claims for accident and sickness insurance may require detailed medical evidence from a doctor. Clients are expected to reasonably assist in their rehabilitation and comply with requests for medical evidence. The insurer will typically cover these costs.

Regulators and client protection. As noted above, life agents are licensed by provincial and territorial authorities. Provincial and territorial insurance legislation requires insurance companies to be financially sound and for life agents to demonstrate fair, responsible and professional conduct.

Provincial and territorial insurance regulators promote transparency to clients, enforce breaches of conduct, provide access to complaint services and equip clients with financial knowledge through consumer education campaigns. 

The OmbudService for Life and Health Insurance is an independent national complaint resolution service to help clients with complaints related to life and health insurance.

Assuris is a non-profit organization that protects policyholders if a life and health insurance company becomes insolvent. Regulators require these insurers to be Assuris members, and a policyholder is automatically protected up to a certain amount or percentage of policy benefit, whichever is higher.

Sources: Publications from the Canadian Insurance Regulatory Organizations and the Financial Services Regulatory Authority of Ontario

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The disability tax credit (DTC) opens the door to several government benefits and programs, in addition to being a valuable tax credit on its own.

That list of benefits now includes access to the new Canadian Dental Care Plan.

On Thursday, the federal government announced that adults with a valid DTC certificate, as well as children under the age of 18, may apply for the program, which provides full or partial dental care coverage to uninsured people with under $90,000 in family income.

The DTC is a non-refundable tax credit that lowers income tax payable for people living with a disability and/or those who support them. It consists of a base disability amount for all eligible individuals and an additional supplement amount for children under the age of 18. The provinces and territories also provide a disability and supplement amount.

In June 2022, the federal government passed legislation expanding the criteria for the mental functions impairment eligibility for the DTC, and removed the requirement that people living with Type 1 diabetes prove they spend at least 14 hours per week on activities related to administering insulin.

To access the DTC, you and your medical practitioner must complete Form T2201: Disability Tax Credit Certificate and submit it to the Canada Revenue Agency.

As of July 2025, low-income Canadians between the ages 18 and 64 with a valid DTC certificate will be eligible for the Canada Disability Benefit, worth up to $2,400.

Here are other disability programs, benefits or credits linked to the DTC:

• Registered disability savings plan
• Home accessibility tax credit
• Child disability benefit
• Medical expense tax credit
• Canada workers benefit
• Child care expenses deduction
• Canada student grant for students with disabilities
• Home accessibility expenses
• Home buyers’ plan
• Home buyers’ amount
• Qualified disability trust election
• Disability supplement to the Canada workers benefit