2026 July Weekly Q&A - Financial Planning
In the month of July 2026, we answered the following questions on Financial Planning.
- How much should I keep in an emergency fund before investing?
- I am single with simple personal finance. I want to leave everything to my parents just in case. Do I really need a Will?
- I am in love and about to get married. Many friends suggest getting a prenup, but I am concerned it will damage my relationship. My partner is a good person whom I trust completely. What shall I do?
- I have been approached many times that I need to get insurance. How do I know if I need insurance or not, and the proper coverage if I need it?
1. How much should I keep in an emergency fund before investing?
The conventional guidance is 6 months of essential living expenses: housing, utilities, food, insurance, and minimum debt obligations. That remains a reasonable benchmark for most people.
That said, the right amount is personal. Someone with stable employment and no dependents may be comfortable with the standard. A self-employed individual, single-income household, or someone in a specialized field may need considerably more.
What matters most is that the emergency fund serves its purpose: it should be liquid, accessible, and completely separate from your investment portfolio. It's not meant to generate returns; it's meant to protect you from the unexpected.
Getting this foundation right before investing is one of the most important steps in building a sustainable financial plan.
2. I am single with simple personal finance. I want to leave everything to my parents just in case. Do I really need a Will?
The word "simple" is worth pausing on because what feels straightforward can become surprisingly complicated.
Without a Will, your estate is distributed according to provincial intestate laws, which follow a fixed legal formula that may not reflect your intentions. In Ontario, that formula does not automatically prioritize parents in all circumstances, and the process of settling an estate without a Will can place a significant administrative and emotional burden on the people you are trying to protect.
A Will also allows you to name an executor. You can choose someone you trust to carry out your wishes immediately when your family are navigating a difficult time. Without one, that decision is made by the courts, which can be a lengthy process and take significantly more time to settle and distribute the estate.
A Will is not just for the wealthy or the elderly. It is a document of love and care for your family, so they don’t need to bear the burden of figuring out your estate while suffering emotional turmoil. It can also ensure that your intentions are recognized, respected, and acted upon.
Lastly, we want to share a friendly reminder to include your pets if you have any in the Will as well, ensuring they will also be taken care of.
3. I am in love and about to get married. Many friends suggest getting a prenup, but I am concerned it will damage my relationship. My partner is a good person whom I trust completely. What shall I do?
The concern about raising this conversation with a partner is one that many people share. A prenup or marriage contract is less about trust and more about clarity. It can be viewed as a form of “insurance”.
Marriage in Canada automatically triggers legal rights and obligations around property and support that apply to both spouses, regardless of intention. Most people are unaware of the specifics of those rules until they are in the middle of a situation where the rules are applied. A marriage contract does not override trust; it documents the most appropriate arrangement both parties mutually agree to, in advance, when there is a strong intention of love and fairness towards each other. This process can actually reduce the possibility of emotionally intensive conflict rather than introduce it.
The conversation itself is worth much more. Discussing finances, expectations, and what fairness looks like to each of you before marriage is something many couples find valuable, regardless of whether a formal agreement follows. From this perspective, the process of considering a marriage contract is less a sign of distrust and more a sign of maturity and transparency on both sides.
Even if the conversation with your partner feels uncomfortable, getting educated yourself is a worthwhile step to take. Understanding what marriage legally means in your province, how assets accumulated during the marriage are treated, what happens to property brought in beforehand, how debt is handled, and what spousal support obligations may arise are things every person entering a marriage deserves to know. This is not about anticipating the worst. It is about making one of the most significant decisions of your life, well-informed and educated.
Whether a marriage contract is needed is an optional and personal decision, while the education process to gain a clear understanding of what marriage legally entails is a necessary step.
4. I have been approached many times that I need to get insurance. How do I know if I need insurance or not, and the proper coverage if I need it?
It is normal to feel overwhelmed by how often you are pitched insurance. The mistake most people make is looking at insurance as a standalone product rather than what it actually is: a risk management tool that belongs inside a broader financial plan. This is a need-based tool and should be evaluated based on one’s need, not the more, the better.
To cut through the noise and figure out if you actually need it, you may first look at the objective and purpose of using insurance in your overall financial plan. Generally, insurance needs fall into two primary categories.
1) Protection. This is about protecting your income and liabilities. If you have a mortgage, business debt, or a family that relies on your income to maintain a lifestyle, you need insurance coverage to replace the income if something happens to you. In these cases, low-cost term insurance would likely suffice.
2) Asset Preservation and Estate Planning. This is about managing final tax liabilities, passing assets to next generations, or optimizing assets and tax liabilities under corporate structures. For established business owners or families with significant assets, permanent life insurance is often used to fund massive capital gains tax liabilities triggered at death, such as on family cottages/property portfolio, corporate shares, etc., or to create a tax-efficient capital transfer from corporate to shareholders.
Determining the exact dollar amount cannot be done with a generic calculator or a rule of thumb based on income or revenue. It requires a comprehensive review of one’s financial plan. You will need to list and analyze your exact financial obligations, including debt, future income replacement for your dependents, education funding, etc. For business owners, this requires analysis of cash flow, business expansion and succession, especially when family members are involved, estate planning, etc.
The goal is to get only what is mathematically required to meet your objectives. Anything more is an unnecessary expense; anything less leaves a structural vulnerability in your plan. Having said that, being self-insured is also an option, though not often used.
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