This is an age-old question and after doing some research on the subject, I have discovered that there are a lot of differing opinions out there. Some say you should pay off all your debt before contributing to an RRSP, while others suggest making RRSP contributions when you are young and then focusing on paying down your mortgage when you are older.
The answer to this question, however, really depends on you and your own personal comfort with debt. There are a lot of people out there who absolutely despise being in debt and will do everything in their power to get out of debt, while others are okay with being in debt, at least to a certain extent.
When considering what to do, it’s a good idea to talk to a tax specialist and/or a financial planner. Sometimes people end up doing ridiculous things in order to avoid paying tax, so it’s important to consider all aspects rather than simply focusing on reducing the amount of tax you pay.
Some specific things to consider when choosing between saving for retirement and paying off your mortgage include your age, current tax bracket, investment returns, mortgage interest rate, and whether or not you have a pension plan.
After skimming through several articles on this subject, I noticed that most people suggest doing both. That way you will feel as if you are getting somewhere, since simply paying down debt is supposedly not as psychologically satisfying. Another opinion I stumbled upon was that it’s better to pay off your mortgage first if your mortgage interest rate is equal to or higher than your RRSP’s rate of return.
It really all boils down to what you deem is most important for your own personal situation. If you want to read chartered accountant David Trahair’s opinion on why you should pay off your mortgage before contributing to an RRSP, check out this link.
If you have come across some extra money due to an inheritance, etc., I would encourage you to do your own research prior to making a decision. There are pros and cons to both sides and it may be wise to do both simultaneously. As the saying goes, it’s not a good idea to put all your eggs in one basket. On the other hand, sometimes it makes the most financial sense to choose one over the other.
While flipping through David Bach’s book 
, I came across a section on payday loans. I have always known that payday loan companies ripped people off, but after reading this section of the book, I am more convinced than ever that payday loans should be absolutely the last resort in a financial emergency. In fact, I wouldn’t even consider a payday loan as a feasible option.
Interest rates have been historically low over the past years and many households have been tempted with the opportunities to borrow to service their wants and needs. As a result many are now realizing that they have created an unserviceable debt situation and are looking for options to get them back on their feet. One of the common avenues to get out of debt is through a debt consolidation loan. While this might seem like a holy grail to get out of your debt situation there are some pitfalls that you need to be aware of.
Anyone that has gone through college or has kids in college knows that it is pricey, which leads to many seeking out student loans. Just as with any type of loan, it is vital that you do your research to find the best student loans for your situation. Different loans will get you different amounts of money with various circumstances behind the loan. However, there are a few things you can do with any student loan to save money.