Money, Power and You
After writing the Senior Dilemma, I really wanted to share ideas that could give my readers power, power over their finances and their future. Though the procedures and concepts that I will discuss are Canadian, I hope that my American friends take the time to research ways to start financially securing their futures.
Let’s start with the basics.
1. Pay yourself first
Each of us carries heavy financial burdens. Monthly bills, the rent, your mortgage, car expenses, are an endless list of debt that at times clouds any hope of a silver lining. There is always a reason as to why we are unable to put away a few dollars. I am here to tell you not to buy into that gibberish. Set realistic goals. If you are paid bi-weekly try a goal of $25 dollars per pay-cheque. WOW! Seems a little too high, well to break it down, $25 amounts to $0.14 a day. You read that right. You have no excuse. Check your pockets, the bottom of your purse, between the cushions on your sofa, and when you find those coins (pennies are money too!), throw them into a jar. Once the jar is half filled, go to the dollar store and purchase coin wrappers. I know that banks will only accept your change if wrapped. Get the kids to help. Make it a family experiment.
- The Savings account vs. Under the Mattress
First off, let me say, that Banks, and Investment Firms, are not greedy. That unfortunately is a human trait. Banks, and Investment Firms are made up of bricks, mortar, glass and wood. The people who work for these institutions have the potential to show true good in this world as well as pure evil. My advice is to do your homework. Be cautious, but don’t allow the misdeeds of some to brand the entire group of individuals who work in the financial industry. We all know the damage that comes when we make an entire group the scapegoat for any misery that touches the world. So, with that, I offer three suggestions to help with your newfound wealth.
a) Tax Free Savings Account - TFSA
b) Registered Retirement Savings Plan - RRSP
c) Savings Bank account
Out of the three, the Tax Free Savings Account is my current favourite. Every Canadian, over the age of 18 should hold this type of savings vehicle. The government allows a maximum contribution of $5000 a year. DO NOT OVER CONTRIBUTE! I cannot stress that enough. The government considers the money that you contribute to the Tax Free Savings account, after tax dollars. Tax implications are nil, when you contribute or withdraw from the account. But one final reminder DO NOT OVER CONTRIBUTE! The government does not look favorably to those who over contribute. While the funds are in the account, you are earning interest on your money. You will not pay the government for those earnings. That money is yours. There are numerous investments you may hold in your TFSA, stocks, bonds, Guaranteed Investment Certificates (GICs), or allow your funds to just earn interest. Read up and figure out what is best for you and your family.
I have no intention of weighing you down with too much information. I want you to feel empowered with your finances and the choices, which you make. Money is not something to be afraid of, or to hate. Money is a means to an end, but do not let it control you. Own your finances.