Cross-Border Finances: A Case Study
Cash Flow for Cross-Border Finances
Leela is finally doing her dream job, consulting to international companies on how to create inclusive environments within their organizations. She also helps her clients deal with internal biases and speaks to large audiences around the world. She is a recognized leader in her field. She even talks to them about economics and finance, but when it came to her own cross-border finances, she was feeling lost.
As a dual US and Canadian citizen, with corporations on both sides of the border that have money flowing into each, there is a lot of complexity in Leela’s cross-border finances and tax life. On top of that, in the past, she’d made some business decisions that hadn’t turned out as well as she’d hoped, leaving her with the additional burden of debt.
Despite this complexity, Leela loves her life, her job, and she makes more than enough money to live a really great lifestyle. However, she’s not saving for the future, her debt is rising, and…somehow… she always seems to owe income tax to both the IRS and Canada Revenue Agency (CRA).
There’s money coming in and money going out… but I can’t seem to get a handle on either… and I always seem to be in debt.
A Different Kind of Meeting
At Leela’s first meeting with Kathryn, she was excited to create some real change in her finances, but honestly a little scared about what it would look like.
What if Kathryn told her she had to stop engaging in some of the things she enjoyed, or start doing some detail-focused tracking that Leela honestly hated? She was surprised by how that meeting went.
Instead of crunching numbers, Kathryn asked Leela many questions about her own past behaviours and experiences with money, as well as her key struggles right now. These included having cross-border (Canadian and US) income all mixed together, making them difficult to untangle at tax time. She wasn’t paying herself an income but just taking out money from her corporations randomly. She really didn’t know what she needed to spend and was using her credit cards more than she wanted, with bills coming in at $2,000 in one month and $10,000 in another.
Together they spent time identifying Leela’s values and articulating them in a way that really resonated with Leela.
From there, they created a written vision for different areas of Leela’s life, focusing on her aspirations for what she wanted her finances to look like, and set some specific and measurable goals that would help Leela attain these with small, easy steps.
Leela left with a bit of homework to help her determine how much she would like to spend from today going forward, and some things to consider before the next meeting. She was really happy to know that there was no need for her to track her past spending and that she wouldn’t be keeping painstaking records in the future.
We Didn’t Say “Budget!”
Over the series of meetings that followed, Leela and Kathryn created a personal spending and savings plan (we didn’t say “budget!”) that had her goals for the lifestyle she wanted in mind. This included short-term goals around clothing, travel, car repairs, insurance, and healthcare. It also included longer-term goals around financial freedom and developing more cross-border business opportunities in areas that really interested her. Kathryn and Leela then worked with Leela’s accountant to create a savings plan for corporate income taxes, corporate sales taxes, and personal income taxes.
Today, Leela is feeling empowered and ready to start on her next venture, releasing the book she’s been writing over the past few years, and promoting it around the world. She knows that she may have reduced income over some period of time while she is working on promotions, but she knows not only that she will have the cash flow to support her, but that she will also have much more money flowing in afterwards. Leela’s continual investment in herself is paying off in spades, and when she gets to the other side of this book launch, she’s ready to create her retirement plan with the Spring team.