Simply Use Common Sense and Better Judgment

This may seem obvious but in finance or life in general, many do not use common sense or they often demonstrate bad judgment. Is it because they are eager for easy solutions or quick profits?

Too Good to be True

Then, if it sounds too good to be true: it’s probably not true! I'm not saying that opportunities to get rich or to improve our lives do not exist. But, I’m only saying that these opportunities rarely come from a stranger, who writes you an email telling you that by giving him some money, you will obtain ten times more...

You Know What Works for You

Systematically Use the Small Tasks Method

Simplify All Tasks

Want to be better organized; one of the first things to do is to adopt the Small Tasks Method.

This method consists of bringing all your tasks into a relatively simple level by breaking down too complex tasks into several smaller and easier to accomplish tasks.

The effectiveness of this method, simplistic at first glance, has been proven over time. Its psychological effects on motivation and productivity are undeniable.

Mysteriously, it’s more interesting to have accomplished 10 tasks out of 40 than 1 out of 4. You have the impression of having completed more.

Learn About RESPs If You Have Kids

In Canada, governments really entice you to save for your children’s education. Especially if you are a low-income family, you must take advantage of all this free money.

Let’s start by looking at the Registered Education Savings Plan (RESP). Although the RESP is a bit complex, it can be pretty interesting for most families.

Here are some highlights of the RESP to help you get the most out of it:

Contributions Not Tax-Deductible: RESP contributions are not deductible from your income tax, contrary to those of an RRSP (Registered Retirement Savings Plan).

Grant and Bond: Instead, governments pay incentives to the RESP in the form of grant and bond.

Tax-Free Growth: money can grow tax-free while in the RESP.

Give Priority to Personal and Family Matters

Family First

While it’s commendable to think of others, you should always take special care of your family. Personal and family matters should be your first priority.

If you don’t do it, nobody will!

Work Hard Without Neglecting Your Family

Some work rigorously and prove to be outstanding managers for their company. But often become careless regarding their family and personal affairs. Therefore give at least as much importance to your family business.

Use Line of Credit to Avoid Paying High Interest on Debt

A Reasonable Interest Rate

A personal line of credit is an excellent way to avoid paying high interest on certain debts.

Interest payable on credit lines is reasonable. Even if it is higher than on a mortgage, it is much lower than, for example, credit cards.

On an As-Needed Basis

Because interest will only be charged if it is used, you can draw from your line of credit only if required.

This enables you to cope with small contingencies and make sure you pay the full balance of your credit cards each month.

Credit lines can also be used as a short-term loan to maximize your RRSP.

Relatively Easy to Obtain

If your financial institution did not already offer you one, it is relatively easy to apply for a line of credit. Depending on your credit rating, it can be expected to pay a few more percentage points than the prime rate, from 1% to 5% more.

The Right Long-Term Choice For Your Mortgage : Variable Rates

History Favors Variable Rates

Interest rates are far from being an obvious issue; we take a chance and venture a guess on what’s going to happen next, but in most cases, variable mortgage rates will be the right choice.

Indeed, historically variable rates have been lower than fixed rates. A variable rate would especially be beneficial if a decrease in rates can be anticipated or even if rates remained relatively stable.

However, a variable rate will not benefit you if a rate increase is anticipated. Thus, the fixed rate today can be lower than the variable rate in a few years.

Fixed Rate Premium

You take a certain risk with variable rates, it’s only normal to be rewarded by a lower average rate.

Provide All Necessary Information to Tax Expert or Software

Tax Experts Need Detailed and Complete Information

If you decide to hire a tax expert, a knowledgeable friend or to use tax software: be sure to provide them with all related information. 

They won’t be able to make a good job and maximize your return if you forgive some receipts or omit relevant information.

Only You Can Know

You are the best person to know your particular situation. Indeed, if you don’t provide all the details of your situation, the expert or software cannot guess. You have to allow them to exploit all possibilities that apply to your tax situation.

So, be sure to provide all current year tax information. Some previous years’ information may also be useful.

Good tax experts will ask the right questions. But still will be more motivated to maximize your return when you provide them organized information and make their job a little easier.

Help to Choose Your Checking Account and Banking Package

Use this Interactive Tool

Because financial institutions are always greedy, be smart and select the banking package that’s right for you.

To ensure that your banking package meets your needs, you can consult the Cost of Banking Guide from the Financial Consumer Agency of Canada (FCAC), follow the link to the interactive tool:

http://www.fcac-acfc.GC.ca/eng/consumers/iTools/COB/default.asp

Limit or Eliminate Banking Fees

With a little creativeness, you will easily limit your banking fees and even in some cases, eliminate them. In fact, depending on your situation, you should pay a monthly maximum of $10 for your banking charges.

Manage Your Credit Situation With Debt Consolidation

Only One Outstanding Loan

Roughly, debt consolidation consists of regrouping multiple debts and taking out a new loan that will allow you to settle all debts at once.

This will leave you with 1 single loan and 1 single payment to handle. It also can enable you to sometimes get a better rate of interest than some of your previous loans.

Be Sure to Carefully Check the Conditions

However, debt consolidation is not a miracle solution and you should be wary of conditions that are not always beneficial to you.

Some credit companies will offer loans under doubtful conditions that will reduce each payment but will only defer the problem.

Doubtful conditions such as: