By 2 Cents on January 28th, 2010 | Category: Retirement | Life is not long, and too much of it must not pass in idle deliberation how it shall be spent.
~ Samuel Johnson
Our series on RRSP Basics continues today with some information on how and when to take money out of your RRSP.
Withdrawing Money Before You Retire
The idea behind RRSPs is that you won’t be taking any money out until you retire. But as we all know, life happens. Here’s how it works if you encounter an emergency where you absolutely need to take some of your money out:
Any money you take out of your RRSP will be added to your income at your marginal tax rate in the year you withdraw it. Your withdrawal will be subject to a withholding tax which will be deducted by your financial institution. The withholding rates for Canadian residents are as [...]
Read on and enjoy … RRSPs: Taking Money Out
By 2 Cents on January 26th, 2010 | Category: Retirement | The road leading to a goal does not separate you from the destination; it is essentially a part of it.
~ Charles DeLint
Yesterday we began a series on RRSP Basics with a primer on what an RRSP is and who should use them. Today, we’re going to look at where you can get them, what you can put in them, and how to decide what you should put in them. There are a few types of RRSPs that you can get:
Basic: These are usually provided through an advisor affiliated with a mutual fund dealer or bank who offers advice on where to invest your money. Self-Directed: These [...]
Read on and enjoy … RRSPs: What Should You Put in Them?
By 2 Cents on January 25th, 2010 | Category: Retirement | Warning: Dates in Calendar are closer than they appear.
~ Author Unknown
Registered Retirement Savings Plans (RRSPs) were introduced by the Government of Canada in 1957 as a means of encouraging Canadians to save for retirement. That need has only grown over the decades as corporate pensions have been cut and the number of companies matching contributions has dwindled.
Many pension plans took a huge hit when the stock market fell in 2008 and 2009. Although they have since recovered a lot of their losses, the crash reminded us that money in the stock market is money at risk.
To make matters worse, Canadians have been saving less, taking on more debt, and keeping that debt on their balance sheets for longer than in the past. In October of 2009, The Globe and Mail ran an excellent series entitled Retirement Lost which outlined many of the [...]
Read on and enjoy … RRSPs: Who Needs Them?
By 2 Cents on January 21st, 2010 | Category: Giving | To give and then not feel that one has given is the best of all ways of giving.
~ Max Beerbohm
Giving is something that most of us like to do. We love to buy great gifts for our loved ones, and we want to support charitable institutions that are close to our hearts. But sometimes when we look at our budget, there just doesn’t seem to be anything left over, or we forget to include giving altogether.
When an occasion to give comes up, it can be a real budget-buster, and may even force us to take on unplanned debt. We’ve been talking about budgeting a lot lately, and the crisis in Haiti has put giving on our minds, so I thought I might go over some ways to incorporate giving – without breaking the budget.
Pay It Forward First
Giving: How to Budget for It
By 2 Cents on January 20th, 2010 | Category: Budgets | There is no one giant step that does it. It’s a lot of little steps.
~ Peter A. Cohen
Update: 6 Remedies for a Debt Hangover is mentioned in today’s Money Hacks Carnival #100 @ The Ultimate Money Blog. Thanks Mrs. Money!
Over the past 2 years, I have had to rework our budget a half a dozen times or so, in addition to running various budget scenarios for potential job changes. So this stuff is pretty fresh for me. For what it’s worth, this post describes how I handle our budget. I don’t decide on percentage allocations up front. This might work for someone just starting out, but most of us have spending commitments that are well-entrenched. Rather, I start by looking at our net income and all of our expenses in detail.
Tools of the Trade
Quicken: I use [...]
Read on and enjoy … How to Make a Budget: My 2 Cents
By 2 Cents on January 19th, 2010 | Category: Budgets | The first step towards getting somewhere is to decide that you are not going to stay where you are.
~ John Pierpont Morgan (Yep, it’s that J.P. Morgan)
Update: This post is included in the Money Hacks Carnival #102 at Passive Income Now. It’s also in the carnival Personal Finance: Third Edition. Thanks!
A lot of people hate the idea of budgeting. They say it’s too constraining. They need more flexibility. I’m not going to lie to you and say I love working on the budget. But I do love it when it’s done. And I love it when an expense pops up and I don’t have to get stressed out about it because our emergency fund covers it. I love it when my kids ask for something and I can tell them definitively whether or not we can afford it and [...]
Read on and enjoy … How to Make a Budget: Your One-Stop Shop
By 2 Cents on January 18th, 2010 | Category: Budgets | Success consists of going from failure to failure without loss of enthusiasm .
~ Winston Churchill
There is no single right way to make a budget. Like most other aspects of personal finance and life we just need to figure out how to make the one that works best for us. Usually, this will mean trying a bunch of different things before arriving at the one that suits us the most. The only thing that is certain is that we do need some type of budget. The key is not to give up after the first few tries. Persistence pays. Here are 5 factors to think about as you prepare your budget:
1. Your Income Structure
The way in which money comes into your income statement is critical for planning cash flow. Here are some [...]
Read on and enjoy … Your Budget: 5 Factors That Will Determine What It Looks Like
By 2 Cents on January 15th, 2010 | Category: Budgets | If you don’t know where you are going, you will probably end up somewhere else.
~ Lawrence J. Peter
Budget. Just uttering the word can make people cringe, squirm, and head for the hills. Even noted personal finance expert David Bachclaims that budgets don’t work. Rather, he says that we should “toss out the budget and make it automatic” using his (I think originally David Chilton’s) pay yourself first principle. The idea is that you would decide to save, say 10% of your pay and just live on whatever is left over.
I have 2 issues here. First, everybody needs some kind of budget. Second, even if you only pay yourself first, you are still practicing a form of budgeting, albeit a weak one. Mr. Bach has some good ideas, but I have to disagree with him on this point. Here are a few ways a budget – any [...]
Read on and enjoy … Do You Need a Budget?
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