by Pam on September 2, 2010
As I have written before, it is important for all of us to have some funds set aside in case of emergency. If your vehicle breaks down or you find yourself out of work for a while, you do not want to have to use your retirement savings. There are key reasons why you should not even consider your RRSP as your emergency funds.
First, you get penalized for withdrawing. You pay withholding tax to the government when you first make your withdrawal.
Second, you have to pay more tax at the end of the year on the amount you withdraw, depending upon your income tax bracket.
Third, there are other negative impacts as well, including the fact that you lose that RRSP contribution room permanently. So as you can see withdrawing from your RRSP is expensive.
To prevent ever having to make an RRSP withdrawal before retirement, consider putting some money aside every payday and using either a Tax Free Savings Account or even just a regular savings account that still pays you some interest. This way you have the flexibility to make RRSP contributions with excess savings before the deadline without putting you in the position of touching your RRSP prematurely. (Build your emergency funds until you have three to six months of living expenses and then any money above that can be used for your RRSP in the event that nothing comes up throughout the year.)
Before putting money into your RRSP, make a mental note that this money no longer exists to you until you retire. It is not back up savings. Don’t even include your RRSP balance when you calculate how much money you have. It’s best if you forget about it, because there is no point in contributing to your RRSP if you intend to use it as emergency funds. It just doesn’t make financial sense.
by Pam on August 27, 2010
We recently switched our phone company in order to save money. In the past we have used Vonage, and for quite a while it worked really well for us and it was inexpensive compared to other phone companies offering service in our area. Unfortunately, as time went on we found that the quality of our phone connection deteriorated and we also started paying more for our monthly phone bill.
So, we decided to try out magicJack. We bought the device at Future Shop for $55 including tax. It is really easy to set up, as all you have to do is plug the device into a USB port on your computer. (You need a broadband Internet connection to use the service.) Then you can either just talk through your computer, or, you can connect the phone cord directly to your regular phone. We found that we get a better quality connection using the phone, and of course, it’s way more convenient, too. However, when we are on the road, if we bring our laptop along, we could technically use our phone service, too, as long as we have access to the Internet. This means we wouldn’t have to use our cell phone and we could avoid expensive roaming charges.
[click to read…]
If you want to save money on your electricity bills as well as be environmentally friendly, there are a lot of creative ways to do just that. Some good tips include buying energy efficient appliances, avoiding rinsing dishes before putting them into the dishwasher, and turning off fans, TVs, and computers when you are not using them.
[click to read…]
There are so many ways to save money for your big day. You don’t have to spend thousands upon thousands of dollars in order to make your wedding day special. In fact, with the help of family and friends, you can have a nice wedding for much less than you might expect.
When my husband and I got married we didn’t have very much money to work with. We both were in agreement that we were not willing to go into debt in order to pay for our wedding. In fact, the idea never even crossed our minds. To us, our life afterwards was much more important than our wedding day.
[click to read…]
Books can be really expensive, but the knowledge we can gain from them is sometimes priceless. That being said, I am all about being a good steward with my money, so below is the process I follow when I want to read a certain book.
Whenever my husband or I learn about a book that we want to read, instead of going out and buying it right away, we check our local library database online to see if they have a copy available. If they do, we put in a request online and we are notified when it is ready for pick up. We do this for all the books that we only plan to read once.
[click to read…]
We can all come up with excuses for not doing things we find distasteful. For some people, saving money is like a dreaded chore and they make up all kinds of excuses in order to avoid saving. Here are the top ten excuses for not saving money:
1. I can’t afford to save money. Actually, instead of thinking this way, you need to understand the importance of paying yourself first. Before the bills get paid and you buy that new gadget that is being advertised on television, tuck away a small amount each month or each paycheck towards both your retirement savings and your rainy day savings.
2. I want to enjoy the here and now and not worry about tomorrow. There’s nothing wrong with enjoying the present, but you don’t want to do so at the expense of your future. You need to make sure that you are properly saving for your future and not getting yourself so deep in debt that you won’t be able to dig yourself out.
3. I’m not good with money so I just can’t seem to save it. This is a money script that is harmful. You need to change the way you think about money. After all, money is just a thing. You can be in control of your own money, it should never have control over you.
[click to read…]
by Pam on February 27, 2010
If you take a close look at your current lifestyle, there are likely one or two habits that you have developed that have cost you a lot of money over the years. My challenge to you is to work towards breaking those expensive habits this year so that you can use that money for bigger and better things such as saving for your future, doing some home renovations, or taking a much-needed vacation.
I’ve listed below just a few of the many expensive habits out there. I’m sure you could come up with more of your own that you need to challenge yourself to overcome.
1. Unused gym memberships – There’s certainly nothing wrong with paying for a gym membership if you actually go to the gym regularly and make good use of it. Unfortunately, however, a lot of people don’t use the gym enough to merit paying for a membership. If you’re one of those people, I recommend canceling your membership and getting exercise by some other method such as jogging with a friend or family member regularly.
2. Specialty coffees – If you find yourself stopping at Starbucks every morning for your favorite specialty coffee, consider buying the mix and making a cup at home. You can bring it to work in a mug or thermos for a fraction of the cost.
3. Buying lunch everyday – Rather than throwing away your hard-earned money day after day by buying lunch at your work cafeteria, get into the habit of bringing your own lunch to work using leftovers from the night before.
[click to read…]
