Teach your Children to Properly Manage their Money with Both an Investment Account and a Fun Account

Investment Account and Fun Account

To help your children adopt good financial habits, open them a Long term investment account. But also open them a Fun account.

Every time your children receive money, ask them to deposit half of it in their investment account and the other half in their fun account.

Subsequently, they can do whatever they want with their fun account money as long as it’s something fun for them.

Carefully Choose When to File Each Income Tax Return

Refunds Early, Payments Later

For each income tax return of your family, choose the most appropriate time to send it.

Thus, if a refund is expected: you should produce the corresponding income tax return as soon as possible. If you anticipate a payment: still prepare your tax return but only send it in a couple days before the deadline. Make sure to avoid late penalties.

All your family’s tax returns don’t have to be filed at the same time. Depending on your situation, maybe Mom’s can be sent in early to get her refund and Dad’s later to make his payment.

For Life Insurance, Know about the Theory of Decreasing Responsibility

Adequate Protection for Young Parents

For most families, life insurance needs are not permanent. Indeed, we need more protection while we are young and less when we get older. This is what stipulates the Theory of Decreasing Responsibility.

Thus, when you're young (let’s say 30): you need a lot of protection because your children are young and depend on you; you probably have some debts and a mortgage on your hands. You slowly start to save. Your death could have serious financial consequences for your family.

Pay Off Your Credit Card Balance Every Month

NEVER Carry a Credit Card Balance

Even though some people think it could help your credit rating, according to my view, carrying a credit card balance is NEVER a good idea.

In fact, if you use a credit card, you should adopt this three-part Basic Personal Finance Rule:

Analyze Your Budget According to Your Activities

The Activity-Based Budget

A different way to organize your budget exists:  the Activity-Based Budget. Rather than using the traditional budget items or headings, this method consists in evaluating the cost associated with each of your activities.

Evaluate Real Costs

In addition to considering direct costs of an activity, the activity-based budget also takes into account indirect expenses, i.e. the cost of various resources necessary to practice the activity. That way, this method enables us to better evaluate the real costs of an activity.

Simply Avoid Wasting

Our society encourages Consumption and Waste

Nowadays, consumer society exposes us to multiple abuses. It’s still possible to afford good time and a little bit of luxury without necessarily wasting.

In fact, by avoiding waste, you'll probably have even more means to get what you really need and want.

More Quality

Why do we always want more? Focus more on quality rather than quantity. Particularly invest in the quality of your relationships; their value is priceless.

Lower Your Credit Card Limit if you’re Not Disciplined Enough

Opt for a Lower Limit

If you’re undisciplined, in addition to eliminating the majority of your credit cards; lower the limit of your remaining credit cards as much as possible.

You will thus avoid temptation more easily.

For Emergencies Only

At worse, only one card with a 500$ limit should be sufficient. 

Ask Your Employees To Evaluate You

The Best People to Evaluate Your Work

Your employees are insiders and they know your business pretty well. Give them a chance to evaluate you. Not you personally but your work and business system. They will love to reverse the roles for once and they will usually summit some constructive ideas.

Annual evaluation meetings can prove to be an excellent occasion for the members of your organization to express their opinion on the leaders of the company.

Boost Your RRSP Contribution With a Short-Term Loan

If you are not able to contribute sufficiently, is borrowing to invest in your RRSP a good strategy?

Repay your short-term RRSP loan with your tax refund

A short-term loan is usually a brilliant idea; you can make a larger contribution to your retirement plan while limiting interest charges.

Towards the end of RRSP season (in February), you can borrow and contribute. You have to make sure to FULLY repay your RRSP loan a few months later when you get your tax refund (in March, April or at worst in May).

This short-term strategy allows you to increase your RRSP contribution without paying too much interest.

Eliminate Most Credit Cards If You’re Not Disciplined Enough

Eliminate Your Credit Cards

If you’re undisciplined, simply avoid credit cards. Destroy them to avoid temptation.

You’re the best person to know your strengths and weaknesses. So be honest to yourself and take all means necessary to improve your bad credit situation.

Only One Card For Emergencies

Don’t just destroy your credit cards by cutting them in small pieces; also take time to call all financial institutions implicated to cancel out your credit cards. Remember that you will still have to pay your balance afterwards.