Life’s not always a beach. There’s work to be done and things to plan for before you play. So let’s start the new year off on the right foot, and make a simple plan for your 2014 saving plan.
Don’t want to have to scramble (again) to deal with last minute financial tasks, like RRSP contribution and tax filing organization? Well, you can make life easier on yourself by sparing a few moments now to plan ahead. Here is a financial 5’er list on what to automate now to simplify your life for the rest of the year.
- Automate your files for your tax filing papers: Set up a few folders to handle all the tax papers that should be arriving soon for this year’s tax filing – tax slips, investment activities summaries; donations, medical and other receipts, etc. Keep these paperwork organized by keeping receipts categorized using envelops and folders. Make sure you mark them clearly to indicate their paper contents. A good starting point is to see what receipts were used from your previous year’s filing.
- Automate your RRSP contributions (*) for this year: For many tax filers, this is still a good way to save money and defer/reduce tax at the same time. Setting up an automatic savings plan for as little as $50 a week will yield you at least $2,600 a year in contributions!;
- Automate to maximize your TFSA contributions (*) for this year: Although your contributions are not tax deductible, the income generated is tax free. You can save your annual contribution limit of $5,500 by setting up an automatic savings plan of only $106 a week.;
- Automate to maximize your RESP contributions (*) for this year: There’s free money from the government (grants) to help with your child or grandchild’s post secondary education. Up to 20% of your contributions to a maximum of $500 a year is available per child. By setting up an automatic contribution of $50 a week will add up to $2,500 a year, and the plan will also be entitled to the maximum $500 grant.;
- Automate your donations for this year: Registered charities prefer receiving regular donations from their supporters than one time donations. It helps them to budget their operations better and for you, it is a no-brainer way to donate. You can set up as little as $20 a month automatic donation to yield you a $240 donation receipt at the end of the year. Check here for information on the super credit available for first time donors.
It’s a good idea to set up these automatic savings and out-transfers at the same time as when your paycheques are deposited into your chequing account. That way, you’ll be more likely to reduce your spending because the money is not in the account anymore.
Now pat yourself on the back for a job well done. You’re set for a more organized and well planned out 2014!
* You are strongly advised to meet with your financial advisor/accountant/tax preparer to determine your optimal contributions level for your specific circumstance.