For Valerie and her two children, this year's holiday season is a painful reminder life is not the same as it once was.
The 50-year-old widow lost her spouse after a long illness earlier this year.
And the family's first Christmas without him marks an agonizingly emotional end to what has been an immensely challenging year -- one in which concerns about the household finances have largely fallen by the wayside.
"During his illness, I fell apart on the financial end of things, and we didn't file our taxes for two years," she said. "Now I have unexpected expenses and I am feeling really under pressure."
A civil servant, Valerie earns about $53,000 a year which, when combined with a CPP survivor's pension, provides a monthly after-tax income of about $3,800.
This sum has been nowhere near enough to cover what Valerie describes as runaway spending of late.
"When I looked at how much money we're spending, I was stunned," she said, adding she spends nearly $1,800 on entertainment, clothing and dinners out every month.
"My spending is out of control."
To make up for the shortfall, Valerie has leaned on the credit card, running a large balance month to month.
The family does have a lot of liquid savings from a life insurance benefit, roughly $63,000 earmarked for various needs.
About $50,000 is split into two accounts for the children, and the remainder will pay for much-needed home repairs.
Valerie says she has been thinking about opening an RESP for her children, but it's just one of many items on the financial to-do list.
Then there's retirement to think about. While Valerie is a member of a defined-benefit pension plan at work, she only recently started her job, so she doesn't know what she can expect from it when she retires -- if she can retire, she says.
For the time being, however, retirement is the least of her financial worries.
"I'm just dealing with the day-to-day, trying to survive," she said.
"But I need somebody to sit down with me and say 'This is how much money you should be putting aside every month.' "
Certified financial planner MaryAnn Kokan-Nyhof says before Valerie can begin thinking about the long term -- such as retirement -- she first needs to take care of her short-term needs.
And first and foremost are her emotional needs.
"She really should enlist the help of a counsellor or therapist who will help her deal with her situation," said the adviser with Desjardins Financial Security Investments in Winnipeg.
"Any experience I have had with these situations has shown me that the future is terribly unknown with many twists and turns, so often, the best strategy is seek regular counselling first, before tackling the finances, because emotional stability and support are critical to getting back on track financially."
As a government employee, Valerie has access to counselling services offered as part of her workplace benefits plan, which can help her deal with the grieving process.
In the meantime, Valerie can try to manage her money as best she can to minimize the damage to her overall financial picture.
"She has listed over $5,153 in monthly spending on a $3,828 monthly income; that is a recipe for disaster," Kokan-Nyhof said. "Already her credit card is at $3,700 with a 24.99 per cent interest rate that will add over $1,000 of interest to that balance in one year."
With ample liquid savings, Valerie should consider paying the debt off and setting aside some funds for emergencies. While she's reluctant to use the money reserved for home repairs, Valerie could consider using some of the children's money to eliminate the debt -- money she can replace later.
Because these funds sit in a savings account outside a registered account such as an RESP, she can use the money for whatever need without triggering tax consequences.
The remainder of the money can then be contributed to RESPs. While opening these registered accounts has been on her to-do list, Valerie should start contributing to them sooner than later, so the money -- along with the government grants -- can start growing tax-sheltered as soon as possible.
Kokan-Nyhof says the Canada Education Savings Grant represents a lot of additional cash for her kids' education. For every $2,500 in annual contributions per child, they will receive $500 in grants. Because they have unused contribution room accumulated from past years, Valerie could contribute enough to the accounts to receive about $5,000 in grants per child.
All told, each child could potentially receive a maximum of $7,200 each in education grants.
Kokan-Nyhof says Valerie can likely replace the cash she will use to pay the credit card debt to her children's accounts once she files the taxes for 2011 to 2013. Because her husband was eligible for the federal disability tax credit, she can expect a refund of at least $1,100 per year for 2011 and 2012. She is also eligible to claim the Manitoba primary caregiver tax credit worth $1,275 a year.
As for retirement, Kokan-Nyhof says without an estimated monthly benefit from Valerie's workplace pension plan, it's difficult to predict what she will need to save for retirement.
Yet, if Valerie could control spending and divert some cash to an RRSP, she would have a nice nest egg by age 65.
"Even $1,000 a month saved, earning a five per cent annual return for the next 15 years would amount to about $250,000," Kokan-Nyhof said.
"But as far as a reasonable date for retirement goes, that's just a stab in the dark right now."
At this point, Valerie just needs to focus on the near term and figure out what 'reasonable spending' is for her household.
"Because we have no idea what her 'normal' spending habits are, she needs to create a budget and stick to it."
The first step, however, is counselling to get through the grieving process for some peace of mind. Otherwise, Valerie likely will have a hard time getting her financial house in order.
"Without stability and support, even the best plan will get derailed," Kokan-Nyhof said. "Valerie was used to working, taking care of her husband and keeping it together for the kids, but now she has to realign herself for a new reality -- and she needs a little help to do it."