Laurie: Talk to your bank, look at consolidation loans, a line of credit.
Laurie: Cut up those (credit) cards!
Question: What are the differences between a RRSP and a TFSA? Which is better?
Question from Jeannette: This January I began converting my RRSPs into my TFSA account. I will be 67 in a few months, and did not have to take these steps until turning 72. My bank advisor thought that this would serve me best. Was this good advice?
Caroline: Tough one to answer because you'll pay tax on that money this year and there's not a lot of room for growth.
Question: When trying to balance multiple financial demands (paying off debt, saving for down payment, saving for retirement), how do you prioritize, how to decide what’s most important?
Laurie: number one thing is to get rid of high-interest debt
Then look at an emergency fund
Preet: See how you're spending your money and what your priorities are. Make a budget so you can see how you're spending.
How do you encourage people to use credit wisely?
Laurie: They're a necessary evil
They can work in your favour if used wisely, for emergencies, planned purposes etc.
Avoid making those impulse purchases
Preet: People spend more when they use credit cards.
What's the smartest way to use money from a tax return?
Caroline: This is money that you've overpaid
Caroline: I would say use it to pay down your debt
You'll sleep better at night says Laurie
Preet: Don't overthink it
Preet: number one, pay down your credit cards, don't carry a balance on your credit cards
Saving for retirement up now
Question: My husband and I are both 43. Our mortgage will be paid off in 5 years due to my husband being able to do the large lump sum payments each year. We have RRSP's, RESP's. We want to start TFSAs now as well. We would like to stop our RRSP monthly payments for awhile to start growing our TFSAs. Is this wise?
Question from Phil: I am 68 and would like to know what the best way to take money out of an RRSP to pay the least amount of taxes, and also make that money available later on without any stipulations?
Question from Brenda: We are five years from retirement. Are we better to have our RRSPs in GICs with the current market so unpredictable?
Question: Is it smart to use online tax software? Or go to an accountant?
IF you've had a year where something has changed, like getting married, having kids etc. Do your research, and be informed says Caroline.
Preet: If your salary doesn't have a lot of complications, do both for a few years and see how they compare (software vs professional)
Laurie: I want to get every single penny i can, so I use a professional.
Take advantage of every single deduction you can
Laurie: A professional might catch what accounting software won't, which might save you money.
Question From Aleema:
My question is regarding CPP deductions. Does this effect your benefit when you retire if you apply for it now? I have been on disability and my insurance provider request me to apply for it.
How does this effect me?
Talking now about paying for your kids' education...question is -- Should I max out my 2 kids RESP?? My financial advisor said to max out our 1st child(oldest) & only 60-80% to our 2nd child.
Big variable is the age difference in the kids, says Preet.
You also have to decide how much of your child's education you want to pay for.
Question: What's your view on getting into debt for your education?
Laurie: growing number of her clients are young people, graduated with lots of debt, living in parents' basement.
Education is worth it, but you have to do your research - research the up and coming jobs
research how much that job will pay you
Question: should you put your money into your child's RESP or your own RRSP?
Preet: There's a balance, you don't want to stop saving for retirement, b/c time is one of your biggest benefits.
Laurie: It's a mistake to not look out for yourself. Hopefully you can do a bit of both, but save for retirement first.
Question: How can I best avoid the high fees that financial institutions charge for managing my mutual fund investments?
Preet: Understand your capabilities and limitations as an investor.
Caroline: people are often surprised with how little their RRSP has grown - this speaks to starting early, so you have longer time to grow