Investing

Some Fast Facts About RRSPs

An RRSP (Registered Retirement Savings Plan) can be a great way for Canadians to save money for retirement.  They have various advantages and disadvantages and some of them are discussed below.

First of all, the advantages:

  • Your contributions to an RRSP are tax-deductible.  You don’t pay tax until you withdraw from it.  Hopefully you won’t have to withdraw any of the funds until you retire.  Presumably you will be in a lower tax bracket by the time you retire and as a result you will pay less tax.
  • Any income or capital gains earned from RRSPs is also tax deferred.
  • You can split your retirement income by contributing to a spousal RRSP and as a result your household will pay less tax.
  • RRSPs can be transferred from one financial institution to another and you can have more than one.

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August 19, 2009
Shopping

The Pros & Cons of Shopping at Costco

the pros and cons of shopping at CostcoCostco is a wholesale store providing all sorts of things from groceries to television sets to engine oil.  When it comes to buying groceries, I find that I can often get better deals at my local grocery store.  Costco doesn’t carry the cheaper generic food brands, and you have to be willing to buy food in large quantities.  Although buying bulk is often cheaper, it can be more expensive at times, so you need to watch.

I also don’t like the idea of having to pay a $56 membership fee to be able to shop there.  There are other wholesale places that don’t charge you anything.  Not only that, but they won’t let you take a tour first before deciding if it’s worth your while to pay for a membership.  You have to pay before you can look around.  Another downer is that you can’t pay using a regular credit card, it has to be a Costco credit card, cash or debit.  I like to use my credit card for everything so I can earn points, but I can’t do that at Costco.

That being said, Costco definitely has its good points.  We save a ton of money on synthetic engine oil – it costs about 70% of what it would cost in regular retail stores.  We’ve also saved a lot of money on buying ink for our printer.  Had we bought it at any other store, we would have paid almost twice as much.  Costco also has cheap clothing and books.  We also discovered some good deals on picture frames, electric toothbrush replacements, and other miscellaneous items.  If you are patient enough to look through the entire store, you are sure to find something you need and find a good deal.

A bonus to shopping at Costco is that they have plenty of people offering samples for everything from sausages to lemonade to candy.  You can be entertained just by walking around the grocery section and trying all kinds of new things!

For us, at least, Costco has been worth the membership fee because of the savings on computer and auto supplies.  The grocery prices aren’t that great, however, if you do a lot of entertaining, you will probably like their inexpensive fruit and veggie trays.  I would encourage you to check it out, but only if you have plans to buy more than just groceries.

August 17, 2009
Wealth

How To Measure Wealth?

“I will be rich if I strike the top prize in this week’s lottery!” That seems to be the most usual exclamation from fellow workers looking for a quick way to escape the rat race.

Thinking back, is wealth really measured by how much money you have in the bank?

A lot of us usually think that wealth is signified by the possession of a lot of money or owning a lot of luxurious items. We have often associated wealthy people with the luxurious house, big car, expensive jewelry they owned or the posh restaurant, which they dine in, etc.

For Robert Kiyosaki however, the concept of wealth is defined simply as “The number of days you can survive going forward if you stop working today”. It is not measured in dollars and cents, but by the number of days, which you do not have to work! It is not your conventional definition, which you might have expected but I must say that this is very logical and common sense!

Based on my understanding of Robert Kiyosaki’s definition of wealth and the concept of income and expenses, I see the amount of money one has, formed just part of the wealth equation. We also need to look at the other part of the equation, which is the outflow of money, i.e., expenses. The number of days we can survive if we don’t work is dependent on the amount of money we have and the amount we spend.

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August 15, 2009
Budgeting

Emergency Fund – How Much Is Enough?

Most people are familiar with Suze Orman’s advice about saving up 8 months worth of living expenses as an emergency fund.  It seems like an awful lot of money, but I can definitely see her point.  Especially in this troubled economy when it’s possible to lose your job and it’s better to have a cushion of money to keep you going while you are looking for another one.  But, when the economy is at its best, do we really need 8 months worth? And if not, how much is enough?

I think it should be a personal choice.  You know what you can comfortably live on.  (If you don’t I would recommend making a budget so you can track how much you spend.) It definitely is a good idea to have some cash on hand in the event of a roof leak or an emergency root canal procedure.  But if an amazing investment opportunity comes your way that is too good to pass up, you may decide to forfeit part of your emergency fund.  That’s okay, as long as you have something else to rely on such as a low interest credit line.  You always want to make sure that you have something to fall back on that won’t charge high interest rates (i.e. you don’t want to have to rely on credit cards.)

If you are unsure about how much you should be saving, you might want to ask yourself this question:  If the worst possible scenario happened to me right this minute, how much money would I need to keep my family going?  No one can really tell you the perfect amount to have saved up for a rainy day.  The point is that it’s important to always have some tucked away.

August 13, 2009
Travel & Entertainment

5 Inexpensive Dating Ideas

Dating doesn’t have to be expensive to be fun!  When my husband and I5 inexpensive dating ideas were dating we didn’t have a lot of money to spend – so we didn’t do the traditional dinner and a movie very often.  Instead, we got creative, and had fun, meaningful moments doing more simple things:

1. We often went to different city parks and had a barbecue or a picnic.  Sometimes we just spent time walking the trails or riding our bikes.

2.  We had our own special walking route that we would take frequently, and sometimes after we would walk for a while we would just sit on a bench and stare at the sky.  At night we would sit and talk and gaze at the stars.

3.  When we did watch movies, we would wait to see them until they came to the cheap theater where the cost of tickets is about a third of the price of the regular movie theaters.  Instead of eating out, we would often cook together, making interesting dishes and just enjoy each other’s company.

4.  We had a lot of fun taking silly pictures of each other wherever we went.   We didn’t have to go anywhere special, but we found that taking pictures is entertaining no matter where you are.

5.  Sometimes we would go for a drive outside of the city and go hiking and exploring wherever we ended up.  That was always a lot of fun.  We still do that once in a while.  It’s always nice to get out of the city.

The most interesting and fun part about dating is getting to know one another.  Whether or not you spend a lot of money is up to you, but it really isn’t necessary to have a good time and create great memories.

August 11, 2009