No matter what income level, more people get into financial trouble because of too much debt than any other reason. 'Too much' means different things to different people. Very few people go through life without making a purchase on credit. However, trying to 'keep up with the Joneses' rushes too many of us into lifestyles we simply can't afford. Buy some things you need on credit, like a home or a car, but save up the cash to buy the things you want.
Front lawns across Canada are sprouting For Sale signs. That this annual phenomena occurs at about the same time as the tax refund season may be purely coincidental. Understanding the financial incentives for home ownership available in the Income Tax Act may save you thousands when buying a home.
The neighbors have a shiny new sport utility vehicle to tow their travel trailer. They take a two week tropical vacation every winter. Their family room is equipped with the latest large screen TV and surround sound stereo system. Many people believe this is a sign of wealth. In fact, this is usually a sign of consumption.
More often than not, the above lifestyle is funded with huge amounts of debt.
Tax Free Savings Accounts (TFSAs) were introduced in 2009 and they seem to be struggling to catch on. Registered Retirement Savings Plans (RRSPs), however, have been around for over fifty years and attract billions of dollars of deposits each year. If you are serious about saving for your future, it is important to know the differences between the two.
While RRSPs and TFSAs seem to be very similar on the surface, they are really apples and kumquats apart. The only similarity is that, within limitations, earnings inside either plan are allowed to grow without current taxation.
As the sovereign debt crisis makes its way around the world, creating havoc in its wake, we can be thankful that Canada has weathered the storm in fairly good shape. The media has given us a play-by-play on the action and many people are concerned with the outcome. While we can't solve the sovereign debt crisis individually, we can focus on our own financial situation. Here are 5 keys for achieving sanity in your personal finances:
With so many doom & gloom news headlines, it is refreshing to know Canadians can still get very low fixed rate mortgages. A recent Financial Post article (March 9, 2012) explains that with big banks competing strongly for new mortgage business, now is a great time for Canadians to refinance their mortgages to improve personal cash flow.