R.E.S.P. For Your Child’s Future

A college/university education is expensive and tuitions will only go up with time. An R.E.S.P. (registered education savings plan) is an excellent way to start planning for your child's future. Consult several institutions before choosing the one right for you. Families have 18 years after your child is born to generate as much of an educational nest egg as possible. The Government will contribute 20%tax free to your contribution. By properly researching this option, your family can start to get an action plan together. With the new year approaching, it would be wise to start a plan if you haven't already.

Know all of your facts before starting your R.E.S.P. One place to start is by Googling the Canadian Government’s R.E.S.P. web site.

http://www.hrsdc.gc.ca/eng/learning/education_savings/public/resp.shtml

Read up and learn all you can about what you are starting to enter in to. Consult lending companies and other institutions to make sure you are financially able to contribute is the first step in planning for your child’s future. Here are a few things you may want to take into consideration.

Positive things that support contributing to the future of your child’s education:

• The government contributes 20% of what you put in.

• There is not any annual contribution limit.

• There is a maximum lifetime contribution of $50,000.

• Lower income families are eligible to receive a higher contribution from the Government.

• Once your child qualifies for a part time or full time education program, family members are allowed to contribute to the fund (Christmas and Birthdays are perfect for this occasion).

• The fund does not have to be collapsed until the 26^th year of maturity. This gives your child extra time to get into the program they want. Should your child not be using this R.E.S.P. you may want to consider this nest egg to be used for yourself and transfer the funds to your retirement plan. Keep in mind that the Government contribution of 20% will be withdrawn and you will be paying the taxes on any amount the fund has made in the interim.

In order to make sure you have made the correct decision, here are a few things to consider:

• The RESP contributions are not tax deductible.

• If your child does not attend any post secondary school you need to be aware of the taxes and rules that apply when withdrawing or closing the account.

• If you are not financially stable, it is recommended that you do not start up an R.E.S.P. due to withdraw fees, admin fees and the potential cost of withdrawing earlier than it’s maturity date.

• You have already paid taxes on the amounts you have contributed. If the R.E.S.P. grows, the difference between what you put in and the 20% the Government adds will be taxed upon redemption. Note if the student is the one withdrawing from the fund the taxable difference is taxed at the student’s rate. If the fund will not be used, you are responsible for paying the taxes on any growth amount.

Your children are your future and New Year’s resolutions can start small and grow over time. To open an R.E.S.P. all you need is a Social Insurance Number for your child and an R.E.S.P. provider. Choosing a provider will be the most difficult task of all. Take your time, shop around and become as knowledgeable as possible.

For more valuable advice please visit www.prudentcreditrepair.ca

Clean up Your Debt by Consolidating it all For the New Year!

Consolidating all of your current debt will make a difference to you and your family in saving and planning for the future. Since the Bank of Canada has decided not to increase prime interest rates, now is a great time to take advantage of low lending rates. This means the lending rates will remain the same for the foreseeable future. The average family owes $150.00 dollars for every $100.00 they earn. How badly are you relying on credit to keep you going? Here are a few reasons why debt consolidation may be one solution for you.

Why should I consolidate my debt?

• By paying off all of your higher interest credit cards in full you will save the difference in interest. Pay all of your Store Credit cards, for example Sears, The Bay and Canadian Tire not just Visa MC and AMX.

• Your banking overdraft fees, interest and monthly surcharges will no longer be added to your current statement. No more penalties in late fee’s and account charges.

• Pay your balance and outstanding amount for your cable, Internet & phone (are you in a contract, If not shop around for better prices).

• Eliminate your stress of collection calls.

• Essentially get a loan for all debt that you owe, roll it into one monthly payment and make sure the interest charged is less than your previous combined interest charges.

Where to look for a consolidation loan.

There are other options to traditional banks' consolidation. Some are credit unions, trust companies and private financial services that provide affordable open vehicle title loans and home equity loans to people with bad credit.

How will this help you and your family?

• By consolidating all of what you owe into one payment you will only be making one payment instead of juggling money from one account to the next.

• The consolidation loan will usually be at an interest level less than the interest rate your credit cards were at. Saving you money.

• Preserving you credit rating by paying off all outstanding debt will look great on your credit report. One monthly payment will generate positive credit history moving forward into the New Year.

• Trying to keep on top of each individual account, card, amount past due is time consuming and stressful.

Making resolutions for the New Year with a clean start will enable you to keep your promises. Consolidating your past financial debt into one affordable payment, lessening your over all interest and expenses is the perfect way to kick off the New Year.

Once you have made a fresh start you are now able to continue in the correct direction. You will start to climb out of debt, create good credit history and most importantly become less stressed by sticking to a budget you can afford. You may now start to, take back control of your debt and are on your way to remaining debt free!

For more valuable information about how to manage money, please visit www.prudentcreditrepair.ca

It's OK to wish folks 'Merry Christmas'

"CHRISTMAS EVE was a night of song that warmed itself around you like a shawl. But it warmed more than your body. It warmed your heart. Filling it, too, with a melody that would last forever," wrote author Bess Streeter Aldrich of the loveliest night of them all.

In previous years, I've written about the true meaning of Christmas and how, just as Manhattan is everybody's town, this is truly everybody's holiday. In those columns, I found myself quoting Blake Gopnik, who unabashedly declares, "Merry Christmas," and follows up with these words: "I know those Christian-sounding words ought to feel odd coming from my lips. I am a third-generation atheist of Jewish ancestry and I'm almost evangelical in my lack of faith. But the words feel fine - 'Merry Christmas!'"

Mr. Gopnik clings to this greeting because "saying something like 'Happy Holidays' or 'Best of the Seasons' sound like bland euphemisms, newspeak, el cheapo substitutes."

He adds: "The wonderfully secular, partly pagan solstice celebration that is coming on Dec. 25 has also had a tie-to Christ for about 1,800 years. The link is too well-forged to try to break it now without diminishing the whole event.

"I find beauty in the most clearly Christian parts of Christmas, and I'm not willing to lose out on it, or let the Christians keep it for themselves.

"I'll buy 'In God We Trust' as crucial decoration on the dollar bill and I'll use 'Merry Christmas' as the right words to usher in the solstice season. So in the full spirit of the holiday, I'd like to wish us, one and all - Christians and Jews, Muslims and Zoroastrians, even my fellow atheists, a very, very Merry Christmas."

AND SO, I, Liz, stand with Mr. Gopnik for the embracing of "Merry Christmas" and of Christmas itself, rather than reducing it to "political correctness." I never buy Christmas cards that say "Greetings of the Season" or "Happy Holidays."

I like to say "Merry Christmas" and I hope Jewish people will say it to me, as well, just as I say, "Happy Hanukkah." And on Dec. 26, I'll be saying, "Glorious and Happy Kwanzaa" to those who keep that as a holiday.

ONE JODY ROSEN wrote an entire book about the Irving Berlin classic song "White Christmas." He described how "a cantor's son from Russia took the Christ out of Christmas by composing one of America's favorite songs. It is the darkest, bluest tune ever to masquerade as a Christmas Carol. And it's not a carol - that implication is religious - it's just a popular song!"

And now for something entirely different. The unusual introduction for Irving Berlin's classic "White Christmas" is often sung in L.A. and New York. Seldom heard, these words precede "I'm dreaming of a white Christmas; just like the ones we used to know ..."

"The sun is shining, the grass is green. The orange and palm trees sway. There's never been such a day, in Beverly Hills, L.A. But it's December, the 24th and I'm longing to be up North."

AND, HERE is another "Christmas song" written by the very funny Tom Lehrer. Sometimes, if he is urged, fans can get Michael Feinstein in his stint at the Regency Hotel in New York to sing this one, whose lyrics include:

Mid the California flora, I'll be lighting my menorah. Like a baby in its cradle, I'll be playing with my dreidel. Here's to Judas Maccabeus! Boy, if he could only see us spending Hanukkah, in Santa Monica, by the sea!

CAN YOU cook a Christmas turkey? Here's Ben Schott's timetable:

Preheat the oven to 350 degrees.

For a 5- to 8-pound turkey, 2 1/4 to 3 1/4 hours. For an 8- to 12-pound turkey, 2 3/4 to 3 hours. For a 12- to 17-pound turkey, 3 1/4 to 3 1/2 hours. For a 17- to 20-pound turkey, 4 1/4 to 4 1/2 hours. For a 20- to 25-pound turkey, 4 1/2 to 5 hours.

Schott and I both advise you to buy a fresh turkey, not a frozen one. I also advise buying a small piece of cheesecloth to put over the turkey's breast so that as you baste it every half hour or so, the breast does not burn.

IN RESEARCHING this and going back to Blake Gopnik in the beginning. He reported that his own "Christmas-crazy family refuses to play carols written after 1900: Our favorite carols all predate the Enlightenment!"

MERRY CHRISTMAS to all and to all a great Eve and a goodnight and when you hear those reindeer stamping on your roof, just thank your lucky stars that you can still hear them.

The Pro’s and Con’s of Taking a Cash Advance on Your Credit Card

The holiday season is already upon us! We as consumers are left making difficult choices in how we choose to spend our hard earned money. When making decisions always way the pro’s and con’s before deciding to go ahead. Taking a cash advance on your credit card is an easy solution that can later have drastic consequences if not fully thought out. Here are just a few things to keep in mind when making the decision to take that advance.

The Pro’s in Cash advances off your Credit Card

·      Cash advances enable you to obtain the cash you desire at your convenience. It’s a very easy solution and you can use it as you see fit.

·      Cash is usually untraceable so that there isn’t any paper trail tying you to where and what you spent it on. For example if you are purchasing something for your significant other (a gift for the holidays but don’t want them to know about it?) cash is a great idea.

·      Some retailers will give you a better deal if they receive cash since they don’t have to pay for the transaction fee on their end. Saving the retailer up to 3.5% by using cash plays a big part in negotiating a better price. Often we forget retailers are also charged by the credit card companies when we use our cards at their locations.

·      If you are in another Country and you need local currency (regardless of the interest that may start immediately,) you will most often receive a fair exchange rate. Know your exchange rate and interest before making that trip.

The Con’s in taking the Cash Advance

·      Most often interest starts as soon as you take the advance out on your card.

·      There may also be additional fee’s associated from the bank machine you withdraw from on top of the interest that starts immediately.

·      If you have not found out your daily limit you could be in for a rude awakening and not be able to take out as much as you need, due to daily limits set up you were not aware of. These limits are usually for your protection incase you loose your card or are robbed.

·      Banks are notorious for upping your card limit with out you knowing. Know your balance before you make the choice so that you are not left stranded thinking you have availability left on your card.

·       Understand that the Banks will apply any payments you make to the older debt and not to your advance regardless if your old debt is with in the interest free grace period.

Other Options to Consider Instead of a Cash Advance

A short-term personal loan from the Bank or other third party lending institutions may give you a better rate instead of your Credit Card Company. You may also be able to negotiate payment terms that won’t look bad on your credit history if you can’t pay back the full cash advance.

The Bottom Line

Do your homework. Call your credit card company and fully understand all the variables. Don’t be embarrassed to ask about every possible scenario.

Questions you may consider asking: What is my interest rate? Will it start as soon as I take the advance? What is my daily cash advance limit? What additional fees could be applied, if so under what circumstances? What is compound interest? Will my monthly payment change?

Armed with knowledge you will make an informed decision and understand all of the Pro’s and Con’s in taking that advance or in choosing to go to a third party lender. For more valuable information contact Prudent Financial Services www.prudentfinancial.net

Creating a Budget for the Holiday Season and Beyond!

The holiday season, with its gift-giving spree, can be an expensive time of the year. So, if you don’t already have a budget, it would be timely to start one.

A budget is a financial plan for monitoring how money flows into and out of your life. It shows how much you’re earning and how much—and on what—you’re spending.

It may reveal buying habits you're unaware of; it can certainly help you plan more effective ways to spend and save for what really matters to you. And it will prevent you from going into a dangerous bad-credit zone, which will imperil your credit score.

Use a budget worksheet

Track your income

First, use a budget worksheet (see link below). Here you will record all your income sources, including investment income and self-employment income.

If you receive a regular paycheck (with taxes deducted at source), then enter the take-home pay only as the amount. This is the amount that you will have to work with to cover your expenses.

Track your expenses

Then, add your monthly expenses—everything from groceries and gasoline to mortgage payments, insurance premiums and RRSP contributions.

(If you make only one annual payment for something, divide it by 12 months.)

Then sort these expenses into two groups: fixed and variable. Fixed expenses stay largely constant from month to month: mortgage or rent, car payments, cable and utilities. These expenses are a basic part of your life and seldom change in the budget.

Variable expenses include entertainment, eating out and, of course, gifts. These expenses will vary from month to month, and are where it’s easiest to make adjustments.

Income vs. expenses

Now, add up your monthly income and your monthly expenses. Hopefully, your income is greater than your expenses. If so, you can use the surplus to top up your RRSP contributions or to pay off your credit card balance.

But if your expenses are greater than your income, you’ll have to bring the two into synch—either by earning more or by trimming expenses. Definitely say no to payday loans and only making minimum payments on credit cards. This is a fast track to bankruptcy or a proposal.

If you have to trim, start with the variable expenses. You can eat out less and go to fewer movies and concerts.

Be sure to do a monthly review of your budget, to see if you’re “on the money.”

After the first month, check your true expenses against what you had projected in the budget. This will reveal where you did well--and where you may need to do better.

Budgeting isn’t complicated, but it does require careful attention to details. Even more important, living within a budget demands discipline and commitment. But it’s a good way to stay financially sound and to avoid a bad credit score! For budget worksheet, please go to: http://www.prudentfinancial.net/downloads/Prudent-MonthlyBudgetPlanner.pdf